One crypto developer on Solana loses funds with gambling

Yesterday, a crypto developer on Solana revealed to have lost $300,000 of user funds with gambling.

He admitted it himself with a post on X. 

Admission of the crypto developer on Solana: “I lost users’ money with gambling”

The developer, known as Hoak, has explained what happened admitting the mistake, moreover repeated, and has not even asked for forgiveness. Indeed, he hinted at being willing to pay for the mistake made, but being effectively anonymous it could be difficult to discover who he is.

He still apologized, but admitting that at this point nothing will undo his actions. 

He defined the incident as:

“the culmination of what has turned into a paralyzing gambling addiction and probably many other psychological factors left unchecked for too long”.

The first case he mentioned is that of the first Breakpoint, when the victims were his brother and Max from Mango DAO.

He then mentioned the Citadel Project, which failed to take off leaving him with his feet on the ground. 

Finally, he revealed that he seemed to have found a balance with Cypher, defining Barrett, Alex, Mark, Patrick, and Meet as a family. However, he admits that, despite working hard trying to innovate in the world of DEX, he failed.

At this point, he has explicitly admitted to taking the funds and using them to place bets. In this regard, he seems to hope to rot in prison. 

Among the victims there were also Titan, SSKP and the extended team of Bankmen. 

However, he admitted that there would also be many other names to mention, both of people who have been financially affected and those who have been dragged into the mud because of the problems he created.

Among these, mention Tiago, Eduardo, and Christian, stating that they are people who have simply been dragged into something they had nothing to do with.

Justification

Hoak claims he hasn’t been himself for a long time, and that he has repeatedly hurt people in recent years who didn’t deserve it in any way, most of the time those closest to him.

He admitted to letting too many things accumulate in his head for too long, letting them consume him until the end of last year and the beginning of this year. 

In reality, he does not explain in detail what happened and why he did it, except by taking responsibility for having probably become a gambling addict as a reaction to his failures. 

Conclude by writing: 

“It was the most exhausting thing to write all this since I was fired by the Rangers last week, at the moment I have no more energy and considering that no one will want to have anything to do with me after all this, I believe there is no room to move forward and actually for me it’s over.”

Whatever happens next is in God’s hands.

Cypher Protocol 

Hoak has developed the DEX on Solana Cypher Protocol. 

The idea was to create a DEX that would allow trading, on Solana, everything that was tradable, especially futures contracts.

This DEX had reached a TVL of one and a half million dollars before imploding in August of last year. 

On August 8, 2023, the TVL suddenly dropped to one third, and on September 4, it went to zero. 

Note that it had only been launched in February 2023. 

Such quick timing is usually typical of scam projects, while Hoak instead seems to deny that it was a premeditated fraud. 

The collapse in August 2023, however, was caused by a hack that resulted in the loss of over 1 million dollars. 

Solana: the crypto developer appropriates users’ funds for gambling

Until yesterday, the reason for the failure of Cypher Protocol was not clear, but the day before yesterday another post was published on X revealing a theft carried out from Hoak’s wallet. 

At that point, faced with the evidence, Hoak had to admit the theft. 

The revelation was made by Cobra (@barrett_io), and later another user revealed that it was actually Hoak who stole the funds from the ransom contract of the code. He also revealed that the theft occurred over several months with a total of 36 withdrawals. 

What has been discovered is that $317,000 in SOL has been sent from Hoak’s address to Binance. 

The theft seems to have occurred months after the August 2023 hack. 

Security

Although in theory the code of smart contracts is public, it is not always easy to understand if it contains weaknesses. 

In this case there were two weaknesses. 

The first was probably a technical weakness, which allowed a hacker to breach the smart contract and take away one million dollars in crypto assets in August 2023.

The second one was about design, as the developer was able to withdraw funds from users and spend them as if they were his own. 

For common users, it is absolutely impossible to analyze a smart contract to understand if it has vulnerabilities, and sometimes it is also for expert users. 

For this reason, it is always recommended to use smart contracts that have several years of stability behind them and that have demonstrated resilience to attacks over time.