Pseudonymous developer Hoak, known for his work on the Cypher Protocol, has made a shocking confession of stealing nearly $300,000 in user funds and losing them through gambling.
In a public statement shared on May 14 in an X post, Hoak admitted to his wrongdoing. This confession came after a post on May 13 by the pseudonymous core contributor Cobra, who revealed the absence of funds. The post went unnoticed until a member of an unknown Discord group brought attention to the issue of fund withdrawals. According to Cobra, on-chain data compiled by him showed that a total of $317,000 in Solana (SOL), Tether (USDT), and USD Coin (USDC) was sent by the address associated with Hoak to the Binance exchange.
CoinStats data shows that Hoak’s wallet held a peak value of $68,365 in digital assets on December 7, 2023, before the funds were sent to Binance. On April 22, the wallet held over $56,000 in digital assets, but over 99% of these assets were transferred in the following two days.
This insider’s actions have dealt a significant blow to the Cypher Protocol, which has been trying to make a comeback after a hacking incident in August 2023 that resulted in the loss of over $1 million in digital assets.
When addressing his actions, Hoak stated that he does not expect understanding but blamed his compulsive gambling addiction for the thefts. Critics of the cryptocurrency industry have often accused it of resembling a casino, and United States Securities and Exchange Commission Chair Gary Gensler famously compared the crypto ecosystem to “casinos in the Wild West,” with stablecoins functioning as “poker chips.”
According to a 2023 survey conducted by YouGov in the United Kingdom, individuals who gamble at “harmful levels” are nearly five times more likely to own cryptocurrencies than the general population, making them more susceptible to negative impacts from crypto trading.
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