Cypher Protocol Insider Steals From Exploit Redemption Contract

A pseudonymous core contributor to the Cypher Protocol that stayed on to rebuild the project after a $1 million exploit in August has admitted to stealing and gambling some of the protocol funds that were recovered.

Hoak, a pseudonymous core contributor to the Solana-based decentralized exchange Cypher Protocol, has stolen from a redemption contract that was set up to recover funds from an exploit last year.

Another Cypher core contributor who goes by the X handle “@barrett_io” shared details of Hoak’s 36 withdrawal transactions from the recovery wallet, where protocol assets ETH, RLB, BONK, ORCA and wrapped versions of SOL were stolen.

Hoak then swapped these assets for USDT, USDC and SOL and sent them to Binance. In total, the amount stolen was worth just under $300,000 at current prices. 

“This is incredibly saddening to me. 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,” said Barrett, who has reportedly reached out to law enforcement.

Hoak admitted to stealing the funds, blaming his actions on “a crippling gambling addiction” in a public statement posted to X. 

My statement on the situation.

TLDR: I fucked up way too hard, way too many times. I don’t expect anyone to forgive me or let this go unpunished.https://t.co/CNq8UFKCkc

— hoak (@hoakbuilds) May 14, 2024

“I know likely nothing I say or do will make things better – perhaps other than rotting in jail. 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,” said Hoak.

The Cypher Protocol was hacked in August 2023, with the attacker draining $1 million worth of funds by exploiting vulnerabilities in its smart contracts that allowed the hacker the ability to take out bad loans and leave the protocol with bad debt.