Cypher DEX Insider Admits to Misappropriating Funds

A key member of the decentralized exchange Cypher, known by the pseudonym Hoak, has confessed to misappropriating a portion of the funds stolen during an exploit in August 2023.

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

He attributed his actions to a “severe gambling addiction” and a range of other “psychological factors that had long been neglected.”

“The accusations are true: I took the money and lost it. Neither I nor anyone else ran off with it. I know that nothing I say or do will improve the situation—perhaps except rotting in jail,” Hoak wrote.

Previously, another Cypher participant, known as Barrett, released a document detailing the movement of the stolen funds.

According to the analysis, Hoak executed 36 transactions withdrawing approximately $260,000 in Ethereum, Bonk, Wrapped Solana, and other cryptocurrencies from the redemption contract. This contract was established to compensate clients affected by the hack, holding $600,000.

cypher contributor Hoak (wallet: 7sKMs4mdqFzFgmcZhMnaZayCFqfDEimAf94A2KKXjrWW) has stolen funds from the cypher redemption contract. This happened over months via 36 withdraws (txs laid out in document).

Summary of movement:
Deployer wallet (ETR8…) withdraws funds from…

— cobra ©️ (@barrett_io) May 13, 2024

“I never imagined that the main participant, who stayed on after the exploit to rebuild the project, would steal the funds intended for compensation,” Barrett wrote.

He added that he had informed law enforcement about his colleague’s alleged actions.

Back in August 2023, Cypher suffered an exploit resulting in the loss of 38,530 SOL and 123,184 USDC, amounting to over $1 million. The team froze the protocol’s smart contracts and recovered some of the funds.