Firelight, an onchain protection protocol, said some deposit addresses failed its funds screening process, leading the protocol to unstake the affected funds and return them to their original addresses. The move involved 87 addresses and a total of 117,500 FXRP. According to Firelight, its current compliance mechanism screens for blacklisted or OFAC-sanctioned addresses both when funds are deployed and throughout the full cycle. If an address is flagged at deployment or during the cycle, the funds remain in the protocol until the cycle ends, earn no rewards, but can still take part in the protection module for the rest of that cycle. Once the cycle ends, the funds are returned and the related wallets are blocked from reconnecting. Firelight said this approach is not sustainable and that it will reverse the blacklist process and unfreeze the affected wallets in the coming days, with the timing and steps for fund retrieval to be announced separately. The protocol added that its security, KYC, and institutional standards will remain unchanged, while a new user-friendly framework will be drafted over the coming weeks after community consultation. Flare co-founder Hugo Philion said 84 Flare addresses were unstaked under the compliance policy and that he will personally provide matching compensation to those that are not sanctioned and not broadly blacklisted.
Firelight said some deposit addresses failed its funds screening checks, and the protocol has already unstaked the affected funds and returned them to their original addresses. The move covered 87 addresses and a total of 117,500 FXRP.
The onchain protection protocol said its current mechanism screens for blacklisted addresses or addresses sanctioned by the U.S. Office of Foreign Assets Control, or OFAC, both at the time funds are deployed and throughout the full cycle.
If an address is flagged either at deployment or during the cycle, the funds stay in the protocol until that cycle ends. Those funds do not earn rewards, though they can still participate in the protection module for the remainder of the cycle.
After the cycle ends, the funds are returned, and the related wallets are barred from connecting again.
Firelight said that approach is not sustainable. It plans to reverse the blacklist process and restore the affected wallets in the coming days. The protocol said the timing and steps for users to retrieve funds will be announced separately.
It also said its security, KYC, and institutional standards will not change. Over the coming weeks, the team plans to develop a new solution that does not disrupt users, and it will seek community feedback before making changes.
Flare co-founder Hugo Philion said 84 Flare addresses were unstaked by Firelight because of the compliance policy. He added that he will personally provide equal compensation to those addresses that are not sanctioned and not broadly blacklisted.
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