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Solana Cypher Protocol Developer Admits Stealing $300,000

Now, the Solana Cypher Protocol Developer Team is finding themselves in the sighs of another investigation after one of the co-founders admitted to making away with over $300,000 from the clients. It was yet another developer of the project who was the first to tell the story and report it to the officials.

Solana-Based Protocol Faces Inside Job

Solana-Based Protocol Faces Inside Job

On Monday, Cobra revealed that Hoak, a Cypher Protocol developer, embezzled funds from the Cypher Redemption Package Contract. He withdrew over $300,000 stealthily from the contract without anyone noticing. A Discord member reported a problem with their withdrawal, leading to the discovery of the issue. Hoak initially assured the user that the problem would be fixed, but it was not.

Analytics show that Hoak conducted around 36 transactions over the past six months, totaling more than $300,000. He swapped assets like Ethereum and Tether for Solana, then sent the funds to a wallet that had received money from Binance. The stolen amounts were 317,000 USDT, 51,785.2 USDC, and 1,830.8 SOL.

Cobra expressed horror over Hoak’s actions, stating his disbelief that a past exploiter could be the one who had taken funds from the redemption contract. As reported by Bitcoinist, the incident led to a $1.03 million hack within the Solana-based DeFi protocol, of which the team managed to freeze more than half but also suffered significant losses while implementing redeployment mechanisms.

With the Redemption Package approach, all users of the protocol will suffer losses in the same way in case of an emergency incident like an exploit. The amount of residual assets that users will receive will be determined based on their shares or participation in the protocol.

Developer Gambles Funds Away

 

Hoak issued an apology and public confession of guilt in a statement on Tuesday. The game developer claims in his written statement that his gambling problem has been an issue for him many times throughout his career. He admitted that he stole the money from the Redemption Package Project, a gambling addiction story, that went untreated. However, he says that he didn’t take any money from the Solana Cypher Protocol Developer; he just gambled it all away. There has to be a way to by some means get hold of those stolen riches.

Developer Gambles Funds Away

After this speech, he repented for his behaviour and declared, “Whatever comes next is in God’s hands.” To Hoak’s confession, the community seemed both supportive and sceptical at the same time. We may deem any giant substance addiction utterly taxing on a person’s life, but the poor software engineer with a special type of misery also drew some sympathy. Not a few others, meanwhile, concluded that Hoak “was blaming his behaviour” while pretending to be blameless and said his problems were on some others’ accounts. Those who claim his act has harmed the users disregarding the motive arrived at this stance by specifying other wrongdoings first.

One community member noticed that he was adding, “They are minor woes, but yet, they are happening”. A YouGov poll conducted in 2023 indicated that many people report gambling harms, which means that UK citizens are also affected by the risks associated with investing in cryptocurrencies and other high-risk trading products. Although cryptocurrencies are in no way synonymous with or enhancing gambling addiction, the UK Gambling Commission reports that consumers who take potential risks think investing in these products is a form of gambling.

Hoak Stole Funds from Cypher Redemption Contract

Barrett accuses Hoak of withdrawing 36 payments that amount to thousands of dollars from the Cypher redemption contract over a few months. The money was first deposited in a wallet that was the link and later transferred to the Binance Plan. Alluding to Barrett’s on-chain data, Hoak’s associated wallet informed about the transmission of approximately $317,000 of Solana, Tether USDT, and USDC to Binance.

According to CoinStats, when they arrived at Binance on December 7, Hoak’s digital assets were about $68,365 at their peak. The next two days saw a 99 per cent success rate. The non-physical wallet’s digital assets—more than $56,000—had been transfer. After a previous incident of theft in August 2023 that took away digital assets worth over $1 million. The DEX, which Cypher Protocol has been trying to recover from, as an effect, this another huge setback.

FAQs

A Discord member reported an issue with their withdrawal, which led to the discovery that Hoak had stolen funds over several months.

Hoak admitted to stealing the funds due to a gambling addiction and apologized, claiming the money was gambled away rather than stolen for personal use.

Hoak withdrew over $300,000, swapping assets like Ethereum and Tether for Solana and transferring them to a wallet that received funds from Binance.

The theft caused significant losses, with the protocol having to freeze some assets while also suffering from the impact of the earlier $1.03 million hack.

Ali Raza

Ali Raza is a contributing crypto writer for Btccoinzone. He is a crypto and finance journalist with over Three years of experience. Ali Raza decided to pursue a career in the FinTech space. He started as a freelance technology writer but turned to crypto after getting acquainted with the industry in 2019. Ali Raza has been featured in several high-profile crypto and finance outlets, including Latestcoinsnews.com, astercrypto.com, and more. He has also worked with some major crypto and DeFi Projects.

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