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XinFin is, in the context of the Globiance incident, both a victim and an institutional perpetrator. While XinFin formally presents itself as a decentralized network, when its decision-making structure, external conduct, and social influence are taken into account, it should be regarded in substance as a social entity that bears responsibilities equivalent to those of a corporation.
XinFin is no longer an experimental project operated by a small group of developers. It is an entity that partners with numerous developers and enterprises and seeks to operate across the globe. Given its scale and influence, XinFin must be far more consciously aware of the level of governance awareness and moral responsibility that is expected of it. Based on the current circumstances, it is difficult to avoid the conclusion that the awareness required of a corporate-level social actor has been severely lacking.
Unfortunately, within the blockchain space there are still individuals who blindly adhere to the notion that “everything in the blockchain world is a matter of self-responsibility.” However, this notion is an illusion in real society and is clearly mistaken. The more closely blockchain becomes integrated with existing society, the more what is required is not a lawless zone cloaked under the banner of “self-responsibility,” but governance, compliance, and moral responsibility. Awareness of these requirements has yet to sufficiently mature.
In particular, XinFin has emphasized compatibility with traditional finance and has deliberately adopted centralized structures such as KYC-enabled masternodes. If, under these conditions, Globiance was positioned as part of the ecosystem and investor trust was actively encouraged, then XinFin’s responsibility becomes all the more significant.
Mr. Atul Khekade (@atulkhekade), having received advice from third parties who clearly understood this structure—and having understood it himself—likely proposed the establishment of a recovery fund for this very reason. XinFin is a social victim betrayed by Globiance, while at the same time being a responsible party on the side of the institutional perpetrator. I understand the essence of his statement to be that he officially demonstrated a willingness to move toward resolution from that position.
And this, precisely, is the posture that a corporation ought to take. If a company is unable to understand this point, then it must be said that it lacks, to a serious degree, the moral awareness required of a social actor in modern society.
Mr. André Casterman (@AndreCasterman) himself is also a victim, having suffered losses to assets entrusted to Globiance. At the same time, by accepting a role as an executive of Globiance, he suffered significant damage to his reputation. Nevertheless, what merits respect is that he has not fled from the responsibility that accompanied his name being listed as an executive, and has continued to fulfill his responsibilities within the recovery fund. This posture deserves deep respect.
As XinFin grows larger as an organization, and as more time passes, it must seriously consider the possibility of being sued by victims of the Globiance incident. If such litigation were to be lost, the amount of damages would tend to increase over time. For this reason, XinFin should act proactively and engage in recovery efforts in order to mitigate potential litigation risks. Anyone with experience in the business world should be able to understand this judgment.
This perspective is not radical or unconventional; rather, it is an approach that has long been recognized in real-world judicial practice.
For example, in the 2001 Enron scandal, investors pursued responsibility not only from the individuals who directly committed wrongdoing, but also from the auditing firm Arthur Andersen. Due to its failure to fulfill its duty to provide proper audits and assurances of reliability, Arthur Andersen faced criminal prosecution (with the conviction later overturned), civil litigation, and severe reputational damage, ultimately leading to its effective dissolution.
Similarly, in the 2018 1MDB scandal, Goldman Sachs was held responsible for its involvement in misconduct related to the Malaysian sovereign wealth fund and was fined billions of dollars for failures in KYC and internal controls.
Furthermore, following the collapse of FTX in 2022, victims filed class-action lawsuits against the exchange operator and related advisors, alleging misrepresentation as a “trustworthy platform” and breaches of supervisory duties.
These cases demonstrate that, in judicial practice, pursuing liability from organizations that conducted due diligence, made recommendations, or conferred trust is considered the orthodox and standard approach, rather than targeting individual perpetrators whose whereabouts cannot be ascertained.
In the Globiance incident as well, XDC publicly explained that KYC-enabled masternodes “provide an additional layer of trust and compliance, allowing enterprises and businesses to participate with confidence while ensuring regulatory alignment.” In addition, Globiance was explicitly positioned as part of the long-term strategy in official ecosystem pages and roadmaps, and was repeatedly endorsed by co-founders and key figures through public statements and praise, thereby being presented to the community as an entity worthy of trust.
These were not accidental associations. They demonstrate that Globiance rationally acquired trust within the official ecosystem framework constructed by XDC itself. Accordingly, this matter cannot be dismissed as merely a problem involving a single exchange. It is an issue that concerns the governance of the entire XDC Network and demands an official explanation and response.
Under these circumstances, it is far more reasonable, in terms of both practical feasibility and the realization of justice, for victims to pursue legal action based on XinFin’s social responsibility and influence, rather than attempting to sue individuals whose whereabouts are unknown. This approach is not merely theoretical; it represents a standard and orthodox strategy in litigation practice.
XinFin’s proposal of a recovery fund can therefore be interpreted as an acknowledgment of these potential litigation risks and an understanding of the necessity of acting proactively.
I sincerely thank @blocksec_xdc@B3lle888@AndreCasterman@atulkhekade. You have all devoted significant effort to addressing an extremely difficult problem, and I hold each of your efforts in deep respect and gratitude. 🙏
However, if you are devoting your energy to the recovery fund at the direction of XinFin, then it is necessary to understand, from a judicial and institutional perspective, one step more deeply the reality of XinFin’s position—namely, that it is both a victim and an institutional perpetrator, and that it bears social and ethical responsibility to participate proactively in the recovery process.
Going forward, with respect to the reconstruction of KYC, I believe it is essential not only to proceed appropriately with the externalization of KYC processes, but also to establish rules that clearly define the legal responsibilities of both parties in relation to node operators, and to implement a mechanism by which explicit consent to those rules is obtained.
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The content of this post represents the personal opinion of Mr. blocksec @blocksec_xdc and not the official stance of XDC. This point must be clearly recognized.
It is highly inappropriate for someone deeply involved in the Globiance matter to publicly state that “XDC has no standing to seek reimbursement from Globiance,” especially before any legal agreement between XDC and Globiance has been finalized. Such a statement should not be made from his position. Matters of legal responsibility or contractual judgment can only be communicated by XDC’s official representatives or legal counsel.
Even if Mr. Atul @atulkhekade were to state in an official setting that “XDC will not hold Globiance accountable,” such a decision would have to be explicitly written into a formal legal agreement between XDC and Globiance. Announcing such a conclusion publicly on social media beforehand risks misunderstanding and could create legal complications. While it is possible that he spoke privately with Atul, it was not appropriate to disclose such matters publicly. More discretion is needed.
In fact, XDC co-founder Atul Khekade has made a clear statement regarding the Globiance issue:
“The rescue fund should at a later date be recovered from Globiance.”
This makes it evident that XDC’s plan to lead the reimbursement process is based on the premise that responsibility will still rest with Globiance. Therefore, Mr. blocksec’s claim that “XDC will not recover the funds” or “has no standing to do so” directly contradicts Atul’s stated position.
Atul’s intent is not only to protect victims but also to clarify legal and structural accountability and to establish preventive measures for the future. Through this statement, he clearly expresses XDC’s intention to pursue proper recovery and legal recourse, rather than absolving Globiance of responsibility. This is the correct stance to maintain the community’s trust.
I believe XDC also bears a degree of responsibility for the Globiance incident. Therefore, the creation of the rescue fund is not merely an act of goodwill but a legally and ethically appropriate response. Otherwise, XDC itself might have faced legal action from affected users—and could very well have lost such a case. The Globiance issue is not solely the fault of Globiance; it is a structural problem stemming from XDC’s prolonged neglect of KYC and internal governance standards. Despite multiple community proposals to implement verified KYC vendors, these were delayed, which contributed to the circumstances that enabled this incident.
By acting proactively before potential lawsuits, XDC made a wise and forward-looking decision, one that also makes sound business sense. The next essential step is to establish a formal legal agreement with Globiance and conduct the reimbursement process with a solid legal foundation. Should Globiance breach that agreement, XDC must be prepared to take legal action. This is critical for ensuring accountability and preventing similar problems in the future.
As long as XDC maintains KYC requirements, some degree of centralization risk will remain. That is precisely why delegating KYC responsibilities to external, trusted vendors is crucial to distributing accountability and ensuring transparency. While full decentralization may not be feasible, institutional design can and should minimize these risks.
Finally, I remain grateful for Mr. blocksec’s dedication and continued efforts. 🙏
However, the content of his recent post could unintentionally undermine the diligent legal and negotiation work being carried out by Atul and the team. Going forward, I respectfully urge that all public statements be made only after the official position has been clearly defined.
Update on the Reimbursement Process
We’ll publish an uptake form for you to submit your reimbursement claim in the coming days. Each claim will be verified (among other things) against on-chain fund flows and the evidence you provide — including Globiance account balances, transaction history, and screenshots.
We’ll also ask for your X (Twitter) handle and Telegram username. These are optional, but a history of posts about your Globiance losses can help validate claims.
The reimbursement process will be overseen by me, @B3lle888, and @AndreCasterman. We may invite other trusted community members to assist in various ways. Please trust only updates from us, and beware of scammers pretending to represent this process.
So far, Globiance appears willing to share some user data with us — but only if users give explicit permission. A consent form for that will therefore be included with the uptake form. That said, whether Globiance provides enough reliable data for us to validate claims is beyond our control.
If Globiance cooperates fully, the process should run relatively smoothly. If not, some or even many cases may prove difficult to verify. Negotiations are ongoing, and we hope Globiance will provide the information needed to complete this effort properly.
A few key points to bear in mind:
Each claim must be independently verified. In some cases, we may reach out for additional information. We don’t yet know how many claims we’ll need to process — so please be patient.
Once a claim is approved, it will be submitted to the XDC team, who will disburse funds from their reserves.
There will be a vesting schedule for reimbursements. The specifics are still being finalized, but this step is economically necessary. For example, payouts might occur in tranches — such as one-third immediately, one-third after six months, and one-third after one year. The final schedule will depend on the number of claims and total XDC distributed.
The percentage reimbursed (e.g., 100%, 90%, 75%) will likewise depend on total verified losses. Atul and Ritesh remain committed to doing everything possible to make victims whole, while also protecting the economic integrity of the ecosystem and its existing holders.
Only XDC losses will be reimbursed (not BTC, ETH, etc.), and the staking rewards Globiance promised users will not be reimbursed.
Finally, once claims are validated and disbursements begin, we’ll provide periodic public updates, including:
• Total number of claims received
• Number of claims verified
• Total funds disbursed (with on-chain data)
Thanks for your continued patience. Once we reach an agreement with Globiance on data sharing, we'll be able to begin the process.