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Pseudonymous Developer Confesses to Stealing Funds from Cypher Protocol
A recent incident involving a pseudonymous developer at Solana-based Cypher Protocol has shocked the crypto community. The developer, known as Hoak, admitted to stealing approximately $300,000 worth of user funds and gambling them away. Here is a breakdown of the events:
Hoak’s Confession and Fund Theft
- Hoak stole around $300,000 worth of user funds from the Solana-based cross-margin decentralized exchange (DEX).
- This theft was brought to light by another core contributor, Barrett_io, who raised concerns about missing funds.
- Hoak made 36 withdrawals from the Cypher redemption contract over several months.
Transfer of Funds to Binance
After withdrawing the funds, Hoak transferred them to an intermediary wallet before sending them to the Binance exchange. On-chain data revealed that approximately $317,000 worth of Solana, Tether USDT, and USDC were sent to Binance.
Impact on Cypher Protocol
This incident comes as a significant setback for Cypher Protocol, which has been recovering from a previous hack in August 2023. The DEX had lost over $1 million worth of digital assets in the earlier breach.
Root Cause: Gambling Addiction
Hoak attributed his actions to a severe gambling addiction that spiraled out of control. Despite acknowledging his wrongdoing, he highlighted the need for addressing gambling addiction within the crypto space.
Crypto Industry and Gambling
The incident involving Hoak sheds light on the parallels drawn between the crypto industry and gambling. Critics often compare crypto trading to gambling due to its speculative nature. The correlation between gambling addiction and participation in crypto trading has been a subject of interest.
Industry Trends
While recent incidents like the one involving Hoak have raised concerns, the overall trend in the crypto industry shows a decrease in losses from hacks and scams. In April, losses from crypto-related incidents hit a low of $25.7 million, marking a positive shift in the industry.
Ian is a cryptocurrency enthusiast blending humor with professionalism. With an engineering background and a storyteller's heart, he simplifies the blockchain world with sharp analysis and a touch of wit. At Cryptowire, he brings his unique perspective to make digital financial innovation accessible to all.
