As part of the long-running Steem drama, the Steem (STEEM) network experienced another fork today. Particularly designed to tackle “constant attack from malicious accounts,” the new hard fork doesn’t appear to have been entirely successful.

Code named “New Steem” the hard fork 0.23 had two primary aims. The first was to reduce the power down period from 13 weeks to four weeks. The second was to seize 23.6 million in STEEM tokens from Steem accounts and stakeholders associated with the Steem blockchain’s rebel and fork, the Hive blockchain.

The latter goal has apparently failed as the seized funds were ‘rescued’ by an anonymous account on major crypto exchange Bittrex, according to a May 20 post by Andrew Hamilton, CEO of JPB Liberty and Steem stakeholder.

Mysterious Steem account

In another attempt to “protect Steem community users' property rights,” Tron’s Justin Sun-led Steem intended to seize some user accounts that supposedly posed a threat to the network.

The hard fork planned to transfer the funds of 64 Steem accounts to another Steem account named “community321.” Bittrex exchange was aware of the plan, specifying the following details in a May 19 blog post:

“The proposed hard fork is considered a contentious hard fork as it transfers the funds of 64 user accounts to a STEEM account named "community32.”

Shortly after the funds were transferred to the community321 account as planned, the STEEM tokens worth about $5.7 million were sent to Bittrex exchange. According to data from the Steem blockchain explorer, the community321 account explicitly asked Bittrex to return the “stolen funds” to their owners:

"These are funds stolen by the Steem witnesses using HF23 May 20th 2020 - please return them to their original owners prior to the fork :)"

Intentions and ownership of community321 are yet to be resolved

It remains unclear if the community321 is connected to Hive. As of press time, Steem’s block explorer website specifies that the ownership and intentions of the community321 account have not yet been revealed.

Hamilton told Cointelegraph that the community321 account was presumably controlled by a person behind the hard fork 0.23. As per the JPB Liberty CEO, there could be a number of scenarios that led to such an action by community321:

“It appears that Justin Sun failed to maintain basic key security on this account. Maybe he got someone else to create it for him and that person kept a copy of the keys. Maybe he copied them somewhere he shouldn't have.”

Brief history of Sun’s Steem drama

The event is just the latest episode in the long-running controversy around Steem, and Hive, a blockchain that was apparently born out of Steem community’s frustration over Sun’s involvement in the Steem blockchain. Soon after Steemit announced that its platform would be moving to the Tron blockchain in February 2020, part of Steem community launched its own fork named Hive.

Today’s drama is not the first attempt to seize funds on the Steem network. In early April, Steem announced a soft fork to freeze 17.6 million tokens associated with its previous witnesses. The ongoing drama continues to escalate as major figures in the crypto community apparently support anti-centralization rebels like Hive. Ethereum co-founder Vitalik Buterin suggested that Steem’s users should move over to the Hive blockchain in response to Steem’s seizure action on May 20.

Meanwhile, Sun denies his involvement in the latest hard fork but still runs his battle against Hive. In a May 20 tweet, the Tron CEO said that he is working with law enforcement to fight against the Hive witnesses:

“As for Steemit Inc., many millions of dollars were stolen by Hive witnesses. We are working w/ law enforcement & will take actions to get our funds back! We have lots of sympathy for all Steem witnesses who has suffered the same at the hands of the Hive witnesses.”