Solana Dev Confesses to Stealing, Gambling Away Cypher User Funds

Cypher protocol contributor “Hoak” confessed to stealing over $184,077 in community funds to feed a growing gambling habit in a public statement on Twitter on Tuesday.

“I know likely nothing I say or do will make things better—perhaps other than rotting in jail,” the pseudonymous developer wrote. “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.”

Hoak’s public confession appears to have been triggered by a simmering investigation that began on the Cypher Protocol Discord server. Cypher Protocol is a cross-margin decentralized exchange on the Solana blockchain.

“First and foremost I would like to deeply apologize to all affected parties, I know at this point nothing is going to take back my actions, and I have to face the consequences, [and] I am also in no way, shape, or form attempting to victimize myself,” Hoak wrote. “But this is the culmination of what snowballed into a crippling gambling addiction and probably multiple other psychological factors that went by unchecked for too long.”

In the confession, Hoak said the situation that led to the Cypher Protocol theft dates back to an unexplained event at the first Solana Breakpoint conference in November 2021.

“The victims were my brother and Max from Mango DAO,” Hoak wrote. “Coincidentally, what someone else did to me and my brother was the same thing I ended up doing to Max.”

The October 2022 Mango Markets hack allowed thieves to make off with $100 million in funds.

According to Hoak, after an unnamed previous project failed to get off the ground, he began working with Cypher Protocol, which offers access to margined spot and derivatives markets and borrowing and lending services.

“I’d found my footing with Cypher,” he recalled. “These guys became family to me, I loved them and the mission we had, I worked and worked, I tried to innovate within the DEX design space, I failed, I worked some more, and I broke.”

Cypher Protocol core contributor Barrett subsequently posted details of the theft on Twitter, including Hoak’s wallet address, alleging that the theft happened via 36 withdrawal transactions over months.

“This is incredibly saddening to me,” Barrett wrote. “I never thought this would be a possibility, having a core contributor who stayed on after the [Mango] exploit to try and rebuild the project be the one who rugged funds from the redemption contract.”

According to the document shared by Barrett assets stolen from the Cypher redemption contract include ETH, RLB, ORCA, RAY, USDT, USDC, BONK, JitoSOL, mSOL, and WSOL. According to the document $314,674 in USDT, USDC, and Solana (SOL) were sent to Binance by Hoak.

As Barrett explained, the theft was first detected when a member of the Cypher Protocol Discord server reported that they were unable to withdraw funds, which Hoak said he would resolve. However, the user reported they could not withdraw after the deadline Hoak provided.

“I have reached out to law enforcement with the information in the below document,” Barrett said, posting a link to a Google Docs document containing extensive details about the theft.

Taking to Twitter, Internet Sleuth ZachXBT said he knew Hoak, adding that he helped the Cypher Protocol team with an exploit in 2023. As a result of that collaboration, ZachXBT said he had Hoak’s personal information.

When Decrypt inquired about whether ZachXBT intended to share that information with law enforcement, he replied, “As needed yes.”

“I currently have no energy left whatsoever and considering no one is going to want anything to do with me after all this, I believe there’s no way forward, and it’s actually over for me,” Hoak wrote. “Whatever comes next is in God’s hands.”

“I’m sorry I fucked up,” his Twitter thread concluded.

Hoak and Barrett did not immediately respond to a request for comment from Decrypt.

Edited by Ryan Ozawa.