We're working on this problem. There will be a solution in the first internal build after the 4.3 release which means after 2 weeks. Sitefinity 4.2 also supports the standard asp.net membership providers through wrappers. This means that you can reuse the 3.7 membership. Here is a post about this:
The fix that we're working will make that all the content will be associated with the original authors and the users will be migrated with their original hashed passwords.
Would it be possible have your project for testing of this feature?
the Telerik team
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