Solana Developer Admits to Misusing $300K of User Funds in Gambling

Last Updated on May 15, 2024

Efe Headshot
Written by

Key Takeaways:

  • A Solana-based Cypher Protocol developer, known as Hoak, admitted to misappropriating nearly $300,000 from user funds to finance personal gambling activities.
  • Hoak’s confession came after suspicions were raised on social media and an investigation into unusual withdrawal activities was triggered by community reports.
  • The stolen funds were transferred in multiple stages to Binance via an intermediary wallet, involving transactions in SOL, USDT, and USDC, marking another significant setback for Cypher Protocol following a previous $1 million hack.

In a surprising confession, a developer affiliated with the Solana-based Cypher Protocol, known pseudonymously as Hoak, has admitted to misappropriating nearly $300,000 from user funds to finance personal gambling activities.

The acknowledgment of the theft came through a detailed statement by Hoak on a social media platform on May 14.

Hoak stated, “To address the elephant in the room, the allegations are true, I took the funds and gambled them away. I didn’t run away with it, nor did anyone else.”

This revelation was initially highlighted by another core contributor of the project, Barrett_io, on May 13.

The issue came to light after an anonymous member of a Discord community raised concerns about difficulties in withdrawing funds, prompting further investigation.

Barrett detailed the method Hoak used to transfer the funds: “Hoak has stolen funds from the cypher redemption contract. This happened over months via 36 withdraws… Deployer wallet (ETR8…) withdraws funds from Cypher’s redemption contract. Then conducts swaps and sends SOL, USDC, and USDT to an intermediary wallet (7sKM…). This intermediary wallet then sends funds to Binance.”

The total amount transferred to the Binance exchange by Hoak was valued at $317,000, primarily in Solana (SOL), Tether USD (USDT), and USDC.

The transactions were tracked using on-chain data. Prior to the theft, Hoak’s wallet peaked with $68,365 worth of digital assets on December 7, reducing significantly to just over $56,000 by April 22, before nearly all was siphoned off within two days, according to CoinStats.

This incident marks yet another setback for the Cypher Protocol, which had already suffered over a $1 million loss from a hack in August 2023.

About The Author

Efe Headshot
Written by

News Reporter

Efe Bravo, a seasoned journalist, delivers compelling insights into the cryptocurrency and blockchain industry.

His articles offer a deep dive into the latest trends, projects, and technological advancements shaping the future of digital finance.

Check Efe out on: