Reflections on the Globiance Incident

— KYC and Governance Challenges Facing XDC —

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Introduction

Globiance is a cryptocurrency exchange that has operated as a platform integrating fiat currency and digital assets, primarily handling tokens such as those of the XDC Network (XDC). Founded around 2019, it promoted itself as an institution close to a financial entity by issuing its own token (GBEX) and claiming a banking license. However, from the fall of 2024 into 2025, serious troubles surfaced—including the freezing of user funds and the suspension of withdrawals—and this came to be known as the “Globiance Incident.”

These asset lockups have lasted from several months to more than a year. Combined with the platform’s opaque operations, they have triggered suspicions of fraud and moves toward class action lawsuits. Above all, the gravest issue is that most investors who entrusted their XDC to Globiance did so specifically for the purpose of staking into XDC masternodes, yet they have been unable to withdraw their assets and continue to face severe consequences to this day.

Globiance has issued statements such as “refunds have begun,” “processed in user groups on a monthly basis,” and “only proportions disclosed,” but it has provided no supporting evidence such as concrete figures or transaction hashes. The removal of its team introduction page has further amplified distrust.

As of September 24, 2025, Globiance has reported progress on refund batches. However, no verifiable information—such as concrete numbers or transaction records—has been presented, leaving significant issues of transparency unresolved.

This situation has also had a tangible impact on investor sentiment, with some voices expressing greater caution toward purchasing XDC. Furthermore, the inability to withdraw XDC from Globiance has made trading more difficult, and combined with declining liquidity, the overall impact on the ecosystem cannot be ignored.

At first glance, this may appear to be nothing more than a management failure at an exchange. Yet in reality, because many investors had deposited their XDC specifically to earn masternode rewards, the repercussions went far beyond the confines of a single exchange. While the anger and disappointment of investors were initially directed at Globiance, over time the suspicion of “why this situation could not have been prevented” extended to the governance of the XDC Network itself—including its institutional design requiring KYC for masternodes.

In this paper, I will, for convenience, refer to this series of events collectively as the “Globiance Incident.” While organizing its background, I will examine the challenges that XDC now faces.

It should be noted that this paper also includes reflections based on my own experience as a direct participant. I personally staked over 10 million XDC on Globiance and was affected by the freezing of funds. On this point, I also referred to it in my X (formerly Twitter) post on May 12, 2025, titled “Quiet Reflections of an Investor — In Response to the Official Announcement from Globiance.” This firsthand experience has directly informed the proposals in this paper concerning the nature of KYC systems and the clarification of accountability.

In addition, this paper does not intend either to defend XDC excessively or to stand in opposition to it in the context of the Globiance Incident. The entity that must be held responsible and strongly criticized is, first and foremost, Globiance itself. While the possibility of lawsuits has been raised, this paper is not written to serve legal proceedings. Rather, it is intended to contribute to future institutional design and debate within the XDC Network. I believe that such discussion will help prevent a second or third occurrence of similar incidents.

Based on my own experience as a victim, I aim to calmly analyze the structural issues inherent in XDC, with the hope that this analysis will deepen future discussions and institutional frameworks. With this as the overarching premise, I now proceed to the following reflections.


(Note)
This article has already been published, but revisions will continue to be made as needed, including the correction of typographical errors as well as the addition and refinement of content and images. The purpose of these updates is to further enhance the substance of this article and make it more useful for readers.

1. Background of the Globiance Incident

The Globiance Incident arose around the XDC masternodes operated by the exchange Globiance, where a large number of investors faced the grave situation of being unable to withdraw their assets. This event went far beyond the management problem of a single company—it had a major impact on the entire XDC ecosystem and shook the trust of the community.

To understand this incident, it is first necessary to grasp the mechanism of masternodes within the XDC Network.

In XDC, operating a masternode requires staking 10 million XDC, and only those who meet this condition are eligible to receive node rewards. Many investors understood this to mean, “If Globiance is operating masternodes, then by depositing funds there, we can receive rewards.” With that in mind, they entrusted their assets for this purpose.

According to Globiance’s official X account, as of December 22, 2022, the company was running as many as 50 masternodes.

Globiance also published a report on its official website, where the following statement was made:

XDC Master Node staking has been a huge success up to date. Today 50 Globiance XDC Master Nodes are now fully-synced and LIVE. The shared staking model allows every XDC holder to participate in XDC Master Node staking whether they hold a thousand or a million XDC.

From my own research, I found that as of December 22, 2022, there were a total of 227 masternodes across the entire XDC Network that had staked 10 million XDC each. Thus, Globiance controlled about 22% of all masternodes in the network. If this figure is accurate, it was an exceptionally large scale—evidence that a significant number of investors trusted Globiance enough to entrust their XDC.

Why, then, did XDC investors place such profound trust in Globiance to the extent of depositing their assets there? And how was Globiance able to expand its number of XDC masternodes to such an extent?

2. Three Reasons Globiance Was Chosen and the Role of KYC

There were broadly three reasons why investors chose Globiance. They can be summarized as follows:

Looking more closely at these three reasons, it becomes clear that behind them lay three governance issues inherent in XDC, intricately intertwined.

Let us now examine each reason in turn.

First Reason

The first reason is that there was no other exchange where investors could stake XDC. Simply purchasing and holding XDC on an exchange would not increase one’s assets. Globiance, however, offered a system in which it would run masternodes with XDC deposited by customers and distribute the rewards. This gave investors a highly attractive means to “make use of XDC that would not otherwise grow just by holding it.”

Second Reason

The second reason is that Globiance emphasized “safety” and “guarantees.” This was its most prominent selling point. For investors, this was highly appealing. Yet in reality, these were no more than Globiance’s own claims and did not by themselves provide any real assurance. Even so, Globiance publicly declared “100% fund guarantees” and “regulatory compliance,” and such statements further bolstered investors’ sense of security. Later, however, it became clear that these guarantees lacked transparent backing.

Reference: Globiance Transparency

At this point, what became a decisive factor for investors was the institutional requirement that “operating an XDC masternode requires staking 10 million XDC and submitting KYC.” The fact that Globiance met this condition gave the impression that it was a formally recognized operator within XDC, and this translated directly into a sense of reassurance. This, then, was a matter of:

We will examine this point in greater detail later.

Third Reason

The third reason is that Globiance’s connection with XDC gave investors strong confidence. On the official XDC website (xinfin.org), Globiance was listed on the ecosystem introduction page, alongside projects such as Circularity Finance and XSwap, under the category of “DeFi / Trade Finance.” The description stated that it was “focused on a long-term strategy to seamlessly integrate fiat and digital assets,” positioning Globiance as a publicly recognized member of the official XDC ecosystem. This falls under:

It should be noted that today, Globiance has been removed from this page.

In addition, Ritesh Kakkad, co-founder of XDC, repeatedly retweeted and praised Globiance’s activities on X (formerly Twitter). For example, when Globiance launched a DEX on XDC, he congratulated them, and when they organized a design contest, he wrote “Kudos to Globiance.” These public endorsements constituted concrete backing, and they highlight:

Furthermore, André Casterman—who for many years promoted XDC as Chair of the ITFA’s Fintech Committee—was officially introduced as a management member of Globiance (Chief Innovation Officer). Among XDC investors, André was a trusted figure, and his presence further reinforced a sense of confidence in Globiance. This, too, relates to governance in trust-building through individuals and authority.

Of course, it is not that the XDC Network, Ritesh Kakkad, or André Casterman acted with ill intent. Rather, it is natural to view their involvement as genuine promotion to expand the XDC ecosystem. At the time, no one could have foreseen an outcome like the present one. The problem was not one of “intention” but that, as a result, a structure emerged that gave investors a strong sense of reassurance, trust, and legitimacy.

Of the three governance issues outlined here, the aspects concerning information dissemination and trust-building through individuals and authority will be left to this chapter. In later chapters, we will focus in particular on governance in institutional design—specifically, the role and nature of mandatory KYC.

3. Centralization and a Sense of Security Brought by Mandatory KYC

In principle, on many EVM chains such as Ethereum, Polygon, and Avalanche, node operation does not require KYC. They adopt a permissionless system in which anyone is free to set up a node. For this reason, the stance of “non-involvement” regarding issues that occur on the network can be understood as having a certain degree of rationality.

XDC, however, deliberately took a different path by making KYC a mandatory condition, thereby steering toward greater centralization rather than decentralization. By requiring both a high stake of 10 million XDC and the submission of KYC, XDC effectively created a system in which it could control and restrict “who is allowed to operate nodes.” In reality, not just anyone could easily operate a node; these conditions strongly filtered who could become an operator.

Furthermore, it was none other than XDC itself that imposed KYC on the operation of masternodes—the very foundation of the chain—and established a system in which only those who passed KYC could earn rewards. Even if one were to argue that “the KYC process was merely formal,” the very fact that “KYC is mandatory” gave investors the impression that “XDC itself is vetting the operators.” That impression, in turn, led to a sense of reassurance among investors—“if they passed, they must be trustworthy.”

As a result, many investors entrusted their XDC to Globiance. The existence of KYC was one factor that created the impression of Globiance as an “XDC-approved operator,” providing reassurance. Without it, investors might have acted with greater caution and possibly avoided Globiance altogether.

If XDC truly aims to be “a neutral network where anyone can participate freely,” then rather than imposing a merely formal KYC requirement, it would be more consistent with that philosophy to abolish KYC altogether.

In reality, however, it is difficult to imagine XDC being able to abolish KYC. Why is that the case? Why is it not easy for XDC to dispense with KYC? And why was KYC deliberately introduced in the first place? It is these underlying questions that we now need to explore.

4. The Purpose of Introducing KYC and Alignment with Financial Institutions

There must have been rational reasons behind XDC’s decision to introduce KYC as a mandatory requirement—something uncommon among other blockchains. However, no official documentation clearly outlining these reasons can be found, nor has there been sufficient discussion on the matter. What follows, then, is my own perspective: the motives behind XDC’s adoption of KYC can be understood as follows.

The Origins of XDC (XinFin)

XinFin, the organization behind the development of the XDC Network, was founded in 2017 as an enterprise-focused blockchain project. From the very beginning, its primary envisioned use cases were trade finance and international payments. It adopted a hybrid architecture combining public and private chains, with a strong emphasis on compatibility with existing banks, payment networks, ERP systems, and other legacy infrastructure.

The project was also designed with regulatory and compliance requirements firmly in mind, including:

• compatibility with ISO 20022 (the international financial messaging standard),
• asset tokenization, and
• more efficient international remittances.

In this way, XDC was a network that, from its inception, was consciously designed to be accepted by financial institutions. Therefore, rather than leaving node operators anonymous, ensuring that they could be identified through legal names or corporate registration was a natural choice.

From this background, the core reason for XDC’s introduction of KYC becomes clear:

Pursuing Compatibility with Financial Infrastructure

In practice, XDC has pursued initiatives to strengthen its alignment with trade finance and broader financial infrastructure. These include:

• partnership with the International Trade and Forfaiting Association (ITFA),
• participation in the TradeTrust platform,
• adoption of monitoring by Elliptic,
• integration of USDC, and
• compliance with ISO 20022.

Seen in this light, it is natural to conclude that XDC’s aim was to give the impression—“from the perspective of financial institutions, this network appears to meet regulatory requirements.”

Given XDC’s origins, it was unlikely to pursue an ideal of “absolute decentralization above all else.” Rather, it was oriented toward integration with existing financial infrastructure.

Among cryptocurrencies, XRP is often cited in discussions of relationships with financial institutions. While frequently criticized as centralized, XRP is recognized as being easier to align with traditional finance. Conversely, in the case of a fully decentralized model like Ethereum, it is in reality far more difficult to achieve compatibility with traditional financial institutions.

Indeed, just as KYC is a global requirement when opening a bank account, it was a natural choice for XDC to adopt KYC in order to provide assurance to financial institutions. At the same time, it also signaled the intent to position the network as a “regulation-compliant foundation” aligned with existing financial infrastructure.

A Sense of Security That Extended to Investors

It is extremely important to note, however, that this assurance created by XDC’s enforcement of KYC was not limited to financial institutions.

For investors as well, the very fact that Globiance had passed XDC’s KYC served as a powerful source of reassurance. Indeed, one of the main reasons so many investors entrusted their XDC to Globiance was precisely this “assurance provided by XDC.”

While XDC may have primarily intended to provide comfort to financial institutions, in practice, investors also came to feel that same sense of reassurance.

Next, to support this interpretation, we will turn to statements made by Ritesh Kakkad, co-founder of XDC, concerning the introduction of KYC and the importance of regulatory compliance.

5. The Direction of XDC as Seen Through the Statements of Ritesh Kakkad

Ritesh Kakkad, co-founder of XDC, referred to the background of introducing a KYC layer into the XDC Network, to on-chain slashing, and to relationships with regulators in his post “XDC Network Protocol Upgrade Proposal: Fully Proof-of-Stake (PoS) Network” published on the official developer platform XDC.dev on June 18, 2022. This provides an important clue as to how XDC has sought to emphasize regulatory compliance and to strengthen its alignment with financial institutions.

In this post, Ritesh mentioned the following points:

1. The Background of Introducing the KYC Layer

2. On-Chain Slashing and Penalties for KYC Violations

3. Engagement with Regulators and International Standards

A Design Philosophy Conscious of Regulation and Financial Institutions

From these statements, it becomes clear that XDC has placed strong emphasis on regulation and compliance, seeking to raise its compatibility with existing financial infrastructure. What we see here is not simply a technical choice, but a design philosophy that deliberately considered financial institutions and regulatory authorities.

Equally important is the fact that such mechanisms gave investors the impression that “XDC is a secure network designed with regulatory requirements in mind.” In other words, this design not only fulfilled accountability to regulators, but also directly contributed to building trust with financial institutions and investors alike.

It is possible that XDC intended to provide assurance primarily to financial institutions by requiring KYC for participation. Yet in practice, investors too developed an excessive sense of reassurance from “XDC’s masternode KYC process.” XDC may have aimed to reassure financial institutions, but it may not have anticipated that investors would place such deep trust in it. If so, this very gap can be seen as one of the reasons why criticisms arose that “governance was insufficient.”

And it was none other than the Globiance Incident where this “insufficient governance” manifested in its most serious form.

6. The Evolution of KYC and Its Balance with Decentralization

The Reality Exposed by the Globiance Incident

Many investors entrusted their assets to Globiance with confidence precisely because it had passed XDC’s KYC requirements. Yet beginning around the fall of 2024, cases of being unable to withdraw funds arose one after another, creating a situation filled with deep anxiety, distrust, and the risk of significant losses.

Criticism of Globiance was, of course, inevitable. But in time, the criticism also came to be directed at XDC itself. The reason is that the impression of “safety” and “legitimacy” that Globiance projected to investors was not simply its own claim. Rather, it had been reinforced by XDC’s mandatory KYC system, its listing on the official website, and the endorsements of co-founders.

From the investors’ perspective, the logic was: “Because this operator is approved by XDC, it must be trustworthy.” Thus, the moment that trust was betrayed, it was only natural that feelings arose holding XDC itself responsible.

If this had been a fully decentralized network, there would have been no room for the network operator to intervene in investors’ decisions, and such criticism might never have been directed toward XDC. However, precisely because XDC deliberately adopted a centralized design by requiring KYC, investors felt a sense of reassurance—“XDC is guaranteeing this.” And as a result, when problems arose, XDC too became a target of criticism.

This point, indeed, represents the fundamental gap between XDC’s policy of prioritizing “compatibility with financial institutions” through KYC and the principle of “self-responsibility” that is expected in decentralized networks.

How KYC Should Evolve

Going forward, the key debate will be whether KYC is even necessary in the first place. Yet considering XDC’s origins, and the history of adopting KYC out of a strong emphasis on regulation and compatibility with financial institutions, it is unrealistic to think that KYC could be abolished outright. The question of its necessity requires careful deliberation.

Rather, it seems we have now reached the stage where KYC should “evolve.” The basic direction of requiring KYC is understandable, and it can be seen as an advantage and even a strength. However, the governance around it has been insufficient, and it is true that many criticisms have arisen from that lack. If KYC is to be enforced, then naturally, responsibility accompanies it on the part of XDC.

What must be considered, therefore, are its substance, its mechanisms for updating, and its systems of review. Specifically, the following measures may be required:

Notably, XDC co-founder Atul Khekade has proposed “outsourcing KYC to professional vendors and utilizing Zero-Knowledge Proofs” (comment), while Anil Chinchawale has likewise suggested the technical prospect of balancing privacy protection with transparency (comment). Furthermore, Arturo Cantera Carrasco has pointed out that “it is time for KYC to be outsourced” (article). Discussions within the community have already begun to concretely explore these directions of outsourcing and introducing ZK Proofs.

Toward Institutionalizing Responsibility

It is especially important to distinguish between two cases:

• an individual or company staking 10 million XDC of their own funds, and
• an exchange staking aggregated customer funds.

The risks are fundamentally different.

When exchanges operate nodes, the risk of customer funds being misused increases, and if bankruptcy or misconduct occurs, the damage can spread widely. And many customers tend to believe, “If this is an exchange that has passed XDC’s KYC, then it must be safe.” For this reason, stricter screening and ongoing monitoring of exchanges and custodial node operators is indispensable.

In other words, if XDC is to realize its intended direction, it must clearly define where the boundary lies between decentralization and centralization, and how accountability is to be assigned. This will be an extremely important issue for the network’s future growth.

Therefore, what must be considered next is “a contractual framework that formalizes responsibility, ensuring that sanctions and remedies function reliably in cases of violations.” In other words, rather than relying on verbal assurances, it is desirable to move toward a system in which the responsibilities of XDC and node operators are clearly defined in a legally and institutionally binding manner.

From this perspective, we will next revisit the Globiance Incident itself and organize the types of accountability that it brought to light.

7. The Types of Accountability Highlighted by the Globiance Incident

As we have seen, the insufficient governance surrounding KYC fostered excessive investor confidence and, in the form of the Globiance Incident, led to grave consequences. This raises the question: what kinds of accountability does XDC bear in such circumstances?

The Responsibilities Facing XDC

Specifically, once XDC enforces KYC, at least the following three forms of accountability may be expected:

Moreover, as in the tragedy with Globiance, if people entrusted their XDC to an exchange that had passed KYC, and subsequently suffered losses, then an additional responsibility arises:

Even if, from a strictly legal perspective, XDC’s accountability may be limited, transparent explanation, the presentation of measures to prevent recurrence, and the creation of remedies may be indispensable for restoring trust.

The Reassurance Given to Investors and the Resulting Responsibility

Here I will offer my own view. What occurred on the XDC network should, in principle, be attributed to the platform itself. Blockchains are meant to embody decentralization, where each participant acts on their own responsibility, and it is this autonomy that has drawn broad support. Because the network lacks a single controlling authority, it enables the creation of a free and open economy, free from the risks of centralization—this has been both the great attraction and the ideal of decentralized networks.

However, XDC chose to incorporate a centralized element by requiring KYC for masternodes. As a result, the structure made it easy for investors to feel reassured that “XDC is guaranteeing this.” Thus, the network’s nature differs from that of fully decentralized systems. Given this centralized design, if XDC is to be held accountable, it is in the area of KYC for masternodes.

Furthermore, in addition to Globiance’s partnership with XDC, the fact that co-founder Ritesh Kakkad repeatedly retweeted Globiance’s activities on X (formerly Twitter), the project’s inclusion on the official website, and the presence of André Casterman—long trusted among XDC investors and known as Chairman of ITFA’s Fintech Committee—on Globiance’s executive team all reinforced investors’ sense of security.

Taken together, these elements positioned Globiance not merely as an exchange but as a “trusted entity,” which in turn was a key factor behind the large amount of XDC entrusted to it.

In light of this sequence of events, it is difficult to assert that “XDC bears no responsibility whatsoever.” By adopting a centralized structure, it is only natural that a certain degree of accountability would follow. Even now, the risk of similar problems arising again remains. KYC for masternodes was likely introduced primarily with compatibility with financial institutions in mind, but in practice it also gave investors excessive reassurance and laid the groundwork for the Globiance Incident. In that sense, its effectiveness still appears to leave challenges unaddressed.

Future Challenges and the Need for Institutionalization

While the current KYC framework has played a role, as long as it remains a matter of mere formal confirmation, loopholes and opportunities for abuse persist. Therefore, the Globiance Incident should be treated as a lesson—and as an urgent issue that cannot be deferred. Going forward, concrete steps must be taken to “evolve KYC.” By incorporating measures such as outsourcing to internationally recognized KYC vendors, Zero-Knowledge Proofs, and periodic re-KYC, the framework can be elevated into a system with true effectiveness.

Moreover, if criminal organizations or antisocial groups were to set up shell companies, or acquire existing firms and thereby pass KYC, they could in fact become masternode operators. If such actors were profiting, would XDC take regulatory action, or insist on a policy of “non-involvement”? Given XDC’s longstanding focus on compatibility with financial infrastructure, this is a question that cannot remain ambiguous. Indeed, as mentioned earlier, co-founder Ritesh Kakkad himself has stated that “AML, KYC, and similar topics always come up when speaking with regulators.”

To resolve such issues, KYC must not remain a matter of identity verification alone, but must be linked to systems with binding force. One concrete path toward this is the introduction of contracts.

8. A Proposal to Link KYC with Contracts

Going forward, introducing a system that incorporates contracts into the KYC process may serve as one effective direction for solving the challenges at hand. By entering into contracts, the obligations and scope of responsibility of node operators—as well as the penalties in cases of violation—can be explicitly codified, thereby significantly enhancing the effectiveness of KYC.

In this article, I will structure the proposal in two stages. The first is the basic framework of “embedding contracts into KYC.” The second advances further, developing this into a mechanism for “ensuring user protection.”

Specifically, the introduction of contracts can be expected to have the following effects:

Proposal 1 (Basic): Embedding Contracts into KYC

First, it clarifies the scope of responsibility. In the event of misconduct by a node operator, both the operator and the XDC team would share a legally binding text defining the extent of each party’s obligations and responses.

Second, it strengthens regulatory compliance. By embedding provisions relating to Anti-Money Laundering (AML) and Countering the Financing of Terrorism (CFT) into the contract, XDC can demonstrate to regulators that it has established not merely a formal KYC process, but a system of accountability.

Third, it codifies the sanctions in cases of violation. By including penalties such as node suspension, forfeiture of stake, or claims for damages, enforcement becomes much easier in cases like Globiance—treating them as “breaches of contract” subject to legal pursuit.

In summary, embedding contracts into KYC greatly enhances its effectiveness. It moves beyond mere identity verification, creating a framework in which both node operators and XDC share concrete obligations and responsibilities, and in which clear responses can be taken when violations occur. This sends a strong message to investors: that their safety is genuinely safeguarded, without leaving ambiguity or opacity as in the Globiance Incident.

Proposal 2 (Advanced): A Mechanism to Ensure User Protection

In addition, particularly in the case of exchanges and custodial nodes, the significance of securing user protection grows even stronger. By specifying, in contractual terms, the scope of responsibility when customer assets are used, users can be reassured that “some degree of protection exists.”

More importantly, contracts allow mechanisms for user protection to be institutionalized. For example, if an exchange uses customer assets for staking, rules on management policies and asset segregation could be mandated contractually. Similarly, compensation systems or obligations for restitution in the event of insolvency could be codified. This allows users to move beyond the vague state of “everything is at one’s own risk.”

Concretely, clauses such as the following could be considered:

A “protection framework” has the potential to remove one of the largest barriers to decentralized finance (DeFi). While DeFi has prided itself on “transparency” and “self-responsibility,” these have also been its weaknesses, as users constantly faced the fear that they must shoulder all risks of hacks or operational failures themselves. That fear, in turn, has been a barrier for traditional investors and institutions to enter. If compensation funds and asset segregation rules were incorporated into smart contract-based systems, users’ confidence would be markedly increased, and the scope of participation would broaden. In short, evolving from “code is law” to “code + contracts are law” would create an environment more readily acceptable to a wider audience.

It is important to recognize here that no matter how sophisticated the system, perfect governance does not exist. Unexpected circumstances and human malice cannot be entirely prevented. Thus, in addition to clarifying obligations and responsibilities through contracts, it is essential to combine these with compensation systems for worst-case scenarios. This complements the limits of governance and reassures investors that “even in the worst case, some degree of protection exists.” In other words, “governance + protection mechanisms” may be the key to transforming the XDC ecosystem into a more trusted network capable of sustainable growth.

That said, blockchains are fundamentally based on the principles of “self-responsibility” and “code is law.” Bringing in wholesale protections akin to those of traditional finance can feel unnatural. However, XDC has from its inception leaned more toward “quasi-financial infrastructure” than toward full decentralization, and it incorporates centralized elements. It is precisely for this reason that investors were prone to feel reassured that “if XDC has conducted KYC, it must be safe.”

Therefore, even without excessive intervention, clearly outlining a contractual framework for user protection appears to be both a realistic and necessary step. Such “contracts premised on user protection” can supplementally provide investors with a level of reassurance comparable to that of traditional finance, building a foundation for participation in the network without undue anxiety.

Of course, these are only proposals. Ultimately, what kind of framework is built must be determined through discussion and consensus across the community. In this sense, now is the time for XDC’s core team, financial institutions, masternode operators, and general investors to confront these issues from their respective standpoints and explore the next step together.

9. Conclusion — XDC and the Next Step Forward

The tragic events surrounding Globiance were deeply painful and regrettable. Yet this was not merely the problem of a single exchange—it revealed fundamental issues for XDC regarding the role of KYC, decentralization, trust, and accountability.

The purpose of this paper is not at all to oppose XDC, but rather to seek solutions together and build a stronger and more sustainable ecosystem. I believe that now is the time—together with the entire community, including Atul, Ritesh, and others—to engage in open and constructive discussion of these issues and to search for concrete solutions. Such efforts will surely serve as the foundation for XDC’s growth into a more trusted network.

I would be grateful if those with an interest in XDC could also share their own thoughts and perspectives on this issue.

Finally, I wish to extend my heartfelt gratitude to all those who are willing to listen to these discussions, to the stakeholders and developers who contribute daily to the growth of the XDC ecosystem, and to the investors who, while bearing risk, continue to support it.

In addition, I offer deep respect and thanks to those who, despite suffering heavy losses from the Globiance Incident, have not given up and continue to raise their voices; to those who have been scrutinizing transactions in order to bring the truth to light; and to those who have provided aid and support, standing by the victims in solidarity.

Above all, I sincerely hope that the vast amount of XDC still entrusted to Globiance will be rightfully returned to investors as soon as possible. While Globiance has stated that “refunds are in progress,” concrete evidence and transaction details remain scarce, and many investors are still unable to withdraw their assets.

The Globiance Incident remains, even now, an ongoing issue for many investors. It is my view that XDC must clearly demonstrate its commitment to investigation and prevention of recurrence, as this will be essential for regaining the trust of both investors and the wider community.

Through this incident, I have also come to feel anew how difficult it is to strike the right balance between “decentralization” and “regulatory compliance” in blockchain. Of course, the ultimate judgment and responsibility for any investment always rests with each individual. With that principle in mind, I believe it is vital to apply the lessons of the Globiance Incident going forward.

Let this event be a turning point—and let us take the next step forward together with XDC.

11ppm

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