As an analyst with a background in blockchain technology and experience in the cryptocurrency industry, I find the situation surrounding the anonymous core contributor to Cypher Protocol, “hoak,” deeply concerning. Hoak’s confession of stealing and gambling away approximately $260,000 worth of the project’s recovered funds from a $1 million exploit last year is not only a breach of trust but also potentially illegal.
A secret member of the Cypher Protocol Solana exchange team admitted to misappropriating approximately $260,000 in the project’s cryptocurrency that was recovered following a $1 million hack last year. They then proceeded to gamble away these funds.
In their public declaration on May 14, the individual identified as “hoak” admitted, “The accusations are valid. I used the funds for gambling and unfortunately lost them.” They clarified, “I didn’t steal it or give it to anyone else.”
A contributor to the Anonymous Cypher project named “Barrett” previously shared a document with X, claiming that a wallet belonging to “hoak” had carried out 36 transactions, withdrawing different quantities of Ether (ETH), Bonk (BONK), Wrapped Solana (wSOL), and other cryptocurrencies from Cypher’s redemption contract. The total amount withdrawn was approximately $260,000.
“It came as a surprise to me that our dedicated team member, who chose to stay and help rebuild the project following the exploit, turned out to be the person who drained funds from the redemption contract,” Barrett expressed on X.
They added they notified law enforcement of hoak’s alleged actions.
In Hoaks statement, he expressed that “it’s unlikely that anything I say or do will improve the situation – the only potential exception being getting incarcerated.”
Hoak described their behavior as the result of a problematic gambling habit that progressively worsened, compounded by various overlooked psychological elements.
After dealing with a series of personal and professional challenges, they managed to find stability with Cypher. However, they admitted that they were unable to come up with new and original ideas in the decentralized exchange (DEX) design sector.
“I worked and worked,” hoak wrote. “I failed, I worked some more and I broke.”
Hoak said they “let too many things pile up in my head for too long, I let them consume me.”
Last year and early this year, I found myself completely unraveled, to the point where maintaining composure was affecting all aspects of my life negatively. I withdrew from long-standing friendships and family connections, failed to meet self-imposed deadlines, and displayed erratic behavior in various ways.
In August 2023, I uncovered an instance where a malicious actor successfully extracted approximately $1 million in value from Cypher Protocol. At the time of the incident, this equated to around one million dollars’ worth of Solana (SOL) and USD Coin (USDC).
The protocol successfully prevented the theft of $600,000 worth of crypto by freezing those funds. Subsequently, it generated a redemption contract and a recovery plan to reimburse affected users for their lost funds.
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2024-05-15 04:35