An unnamed individual who plays a crucial role in the Solana exchange known as Cypher Protocol has come forward, admitting to embezzling and squandering approximately $260,000 worth of the project’s digital currency. The funds were recovered following a $1 million cyber attack last year.
In a public statement shared on May 14th via an online platform called X, the contributor, who is identified as “hoak,” confirmed the veracity of the allegations. They stated, “I confess that I took the funds and gambled them away. I did not abscond with the money, nor did anyone else.”
Earlier, an anonymous Cypher contributor named “Barrett” had published a document on X, alleging that hoak’s wallet made a series of 36 transactions, withdrawing various amounts of Ether (ETH), Bonk (BONK), Wrapped Solana (wSOL), and other cryptocurrencies from Cypher’s redemption contract. The total value of these transactions amounted to approximately $260,000.
Barrett expressed disbelief, writing, “I never imagined that a core contributor, who stayed with the project after the cyber attack to help rebuild it, would be the one responsible for siphoning funds from the redemption contract.” Barrett also mentioned that they had reported hoak’s actions to law enforcement authorities.
In hoak’s statement, they acknowledged that their words or actions would likely do little to rectify the situation, except perhaps facing legal consequences. Hoak attributed their actions to a severe gambling addiction that had spiraled out of control, compounded by other untreated psychological factors. They stated that despite finding solace in their work with Cypher after encountering personal and professional difficulties, they failed to introduce innovative ideas in the decentralized exchange (DEX) field.
“I toiled tirelessly,” hoak wrote. “But I stumbled, persisted, and eventually broke.”
Hoak admitted that they had allowed numerous issues to accumulate in their mind for an extended period, allowing them to consume their thoughts entirely. They described losing control towards the end of last year and the beginning of this year, to the point where their struggle to maintain composure began to affect all aspects of their life. This included distancing themselves from long-standing friendships and family, failing to meet self-imposed deadlines, and displaying erratic behavior.
In August 2023, Cypher Protocol fell victim to a cyber attack, resulting in the theft of $1 million worth of Solana (SOL) and USD Coin (USDC) at the time. The protocol managed to freeze $600,000 worth of the stolen cryptocurrency. Subsequently, they devised a redemption contract and a recovery plan to reimburse users for their stolen funds.
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