Cypher Protocol Contributor Confesses to Major Theft Driven by Gambling Addiction
In a startling confession, an anonymous core contributor to the Solana-based exchange Cypher Protocol, known as “hoak,” has admitted to stealing approximately $260,000 worth of cryptocurrency from the project.
Cypher Protocol insider admits to theft and gambling addiction.
LISTEN TO THIS ARTICLE:The contributor disclosed that crippling gambling addiction and unchecked psychological factors led to their actions.
Cypher Contributor Confesses to Stealing
The theft involved funds recovered from a $1 million exploit that hit Cypher Protocol last year. In a public statement shared on May 14 via a post on X, hoak confessed, “The allegations are true, I took the funds and gambled them away. I didn’t run away with it, nor did anyone else.”
Earlier, another anonymous Cypher contributor, “Barrett,” had posted a document on X accusing Hoak of withdrawing various cryptocurrencies, including Ether (ETH), Bonk (BONK), and Wrapped Solana (wSOL), from Cypher’s redemption contract. The total amount withdrawn was around $260,000. Barrett expressed shock and disappointment, stating:
I never thought this would be a possibility, having a core contributor who stayed on after the exploit to try and rebuild the project be the one who rugged funds from the redemption contract.
In his statement, hoak admitted, “likely nothing I say or do will make things better — perhaps other than rotting in jail.” He explained that his actions were driven by a gambling addiction that had spiraled out of control, compounded by various psychological issues that had been left unaddressed for too long.
Hoak recounted a series of personal and professional setbacks, claiming that he had found some stability with Cypher but struggled to innovate within the decentralized exchange (DEX) design space. The stress and unresolved issues led to a breakdown, causing him to distance himself from friends and family and exhibit erratic behavior.
“I completely lost it late last year and earlier this year to the point where simply trying to hold it together was impacting everything else in my life.” Hoak wrote. He described his inability to meet deadlines and maintain relationships, which contributed to his descent into gambling as a coping mechanism.
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Insider Theft Highlight Urgent Need for Oversight
The incident that precipitated this situation occurred in August 2023, when an exploiter stole $1 million worth of Solana and USD Coin from Cypher Protocol. While the protocol managed to freeze $600,000 of the stolen crypto, it subsequently created a redemption contract and a recovery plan to reimburse users for their lost funds.
The revelation of Hoak’s betrayal has added another layer of complexity to Cypher Protocol’s recovery efforts. It serves as a stark reminder of the vulnerabilities and pressures that contributors to decentralized projects may face. As the community grapples with this breach of trust, it underscores the need for stringent oversight and support mechanisms within the rapidly evolving world of cryptocurrency and decentralized finance.
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