As a seasoned analyst with extensive experience in the cryptocurrency space, I find Hoak’s confession of stealing and gambling away more than $300,000 of user funds from Cypher Protocol deeply concerning. This incident is particularly alarming given that Cypher Protocol is a decentralized exchange (DEX) offering access to margined spot and derivatives markets along with lending and borrowing services.
I, as an analyst, have uncovered startling news regarding Hoak, the anonymous figure behind the development of Cypher Protocol. Hoak has admitted to misappropriating over $300,000 worth of user funds for personal gambling activities. Cypher Protocol is a widely-used decentralized exchange (DEX) on the Solana network that grants access to margined spot and derivatives markets, as well as lending and borrowing services.
As a researcher studying recent developments in the tech community, I came across a confession made by an anonymous developer on social media platform X on May 14, Tuesday. The developer acknowledged the accusations against him, admitting that he had indeed misappropriated the funds and gambled them away. He clarified that no one else was involved in the incident and that he took full responsibility for his actions. Regarding the consequences of his actions, he expressed understanding that little he could say or do would make things right, possibly suggesting a willingness to face legal repercussions.
As a crypto investor, I’ve recently learned that Hoak, one of the team members behind a certain project, admitted to the lack of funds after Barrett_io, a core contributor using a pseudonym, publicly disclosed this information on May 13th. Unfortunately, this revelation went unnoticed until an anonymous member in our Discord group brought up concerns about encountering issues with fund withdrawals. Barrett then confirmed the truth of these difficulties, explaining that there were indeed no available funds at the moment.
As a crypto investor, I’d put it this way: “For several months, someone managed to drain funds from the Cypher redemption contract. The process involved the Deployer wallet (ETR8…) making withdrawals from Cypher’s contract. Subsequently, these withdrawals were used for swaps and the obtained SOL, USDC, and USDT were sent to an intermediary wallet (7sKM…). Ultimately, this intermediary wallet transferred the funds to Binance.”
Moving Funds to Hoak Address on Binance
According to the blockchain information gathered by Barrett and data from Coinstats, Hoak transferred approximately $317,000 in Solana, USDT, and USDC towards a Binance-linked address of his own on December 7, 2023. Prior to this transaction, Hoak’s wallet held around $68,365 in cryptocurrencies as reported by Coinstats.
As of April 22, the wallet contained approximately $56,000 in digital assets. However, within the next two days, the insider transferred out nearly all of these assets, inflicting additional damage to Cypher Protocol’s recovery efforts. This latest incident follows closely on the heels of a significant hack in August 2023 that cost the DEX over $1 million in digital assets.
Hoak admits that he was ensnared in the grip of compulsive gambling behavior. “I’m not trying to play the victim here, but this is the outcome of a problem that grew increasingly debilitating due to my unaddressed gambling addiction and likely other hidden psychological issues,” he explained.
Events like these strengthen the argument of crypto critics, who claim that the industry bears striking similarities to gambling dens and is riddled with questionable practices. Previously, the Chairman of the US Securities and Exchange Commission (SEC), Gary Gensler, has made a comparable assessment, likening the crypto sphere to “Wild West casinos.”
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2024-05-15 15:27