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The founder and anonymous developer of the Solana-based Cypher Protocol, known only as “Hoak,” has apparently taken a “self-coup” at the protocol. On Tuesday (14), Hoak admitted that he stole $260,000 worth of cryptocurrencies from the protocol.

According to the current price, the value corresponds to just over R$1.3 million. The most surprising thing is that this value came from cryptocurrencies that were recovered from an attack that hit Cypher last year. From this theft, the protocol managed to recover around US$1 million.

In short, Cypher Protocol suffered a hacker attack, recovered US$1 million in cryptocurrencies and then suffered a theft of 25% of that amount at the hands of its own founder. In his statement, Hoak admitted the crime and apologized for the damage caused.

Founder confesses to theft

Hoak wrote a public statement on his X. Na profile message, the founder of Cypher Protocol admits the theft allegations but said he did not flee with the funds. He claims that he simply “threw the cryptocurrencies away.”

“The allegations are true. I took the funds and threw them away. I didn’t get away with it (the stolen funds), nor did anyone else,” Hoak said. He also acknowledged the impact of his actions on Barrett, his fellow protocol member.

In fact, it was Barrett who initially exposed the robbery and named Hoak as the perpetrator. According to him, Hoak executed 36 transactions, withdrawing Ether (ETH), Bonk (BONK), Wrapped Solana (wSOL) and other cryptocurrencies from Cypher’s wallets.

“Barrett is definitely the person who has been hurt the most during all of this. I know that probably nothing I say or do will make things better – other than my arrest,” Hoak added.

After admitting guilt, Barrett was surprised and also disappointed with the action. But he said he notified authorities about Hoak’s role in the robbery.

“I never thought that would be a possibility. Having a main collaborator who remained after exploration to try to rebuild the project and him being precisely the one who stole the funds from the salvage contract,” she said.

Hoaks’ public statement

In his public statement, Hoak gave an account of the reasons that led him to act in this way. The creator of the protocol attributed his action to a “paralyzing gambling addiction” and other “psychological factors that got out of control for too long”.

Hoak demonstrated remorse for the damage inflicted on personal and professional relationships and expressed regret over the case. He stated that he seemed to have found his footing at Cypher after failing in other projects.

“After Project Citadel couldn’t get off the ground due to a lot of things going on in our personal lives, I was grounded for a while and things seemed to get better, I found my balance with Cypher,” said Hoak. “I worked and worked, tried to innovate in the DEX design space, failed, worked some more and went broke.”

In August 2023, Cypher Protocol was the victim of an attack, resulting in the theft of approximately $1 million in Solana (SOL) and USDC. Despite this setback, the protocol successfully froze $600,000 worth of stolen cryptocurrencies.

The money that was in the contract that Hoak violated and stole would be used to reimburse the victims of this attack.

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