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Investors demand control of funds amid HectorDAO hack investigation

TL;DR

  • HectorDAO investors want control of funds post-$2.7M hack, amid team silence.
  • Hack is likely inside the job or key compromise, worsening DAO’s struggles.
  • Legal action looms as the investigation drags on, leaving HectorDAO’s fate uncertain.

Amidst escalating tensions and unresolved communication issues, investors of HectorDAO on the Fantom network are intensifying their demands for control over the protocol’s remaining funds. This comes after a significant hack on January 15, 2024, which resulted in losses totaling $2.7 million.

Communication breakdown and allegations of negligence

Investors allege that the HectorDAO team ceased all communication following the hack, exacerbating concerns about the security of their assets. An anonymous investor revealed that the team had halted communication with the community as early as January 19, with previous channels muted in September 2023.

Troublingly, prior warnings about security vulnerabilities appear to have been ignored. CertiK, a blockchain security firm, reportedly alerted the HectorDAO team to risks associated with certain functions within the protocol. Despite recommendations to mitigate these risks, the team allegedly did not implement the suggested changes.

Analysis of the attack suggests that the exploit may have originated from within the HectorDAO team. Blockchain investigations revealed that the attacker allegedly accessed the team’s deployer account, raising suspicions of an inside job or a compromised private key.

The attack unfolded with meticulous precision. On January 15, the attacker initiated a series of transactions, culminating in the siphoning of $2.7 million worth of assets. Subsequent attempts to rectify the situation by the HectorDAO team were met with further skepticism from investors.

HectorDAO’s troubled history and liquidation attempts

The hack represents the latest setbacks for HectorDAO, which has grappled with challenges since the onset of the crypto winter. Plummeting token prices and losses incurred during the Multichain bridge hack in July 2023 have severely impacted the protocol’s viability.

Despite a vote to liquidate the DAO in July 2023, the distribution of funds to investors had yet to be completed by January 15, 2024. The hack abruptly halted efforts to resume the redemption process, leaving investors disillusioned and seeking recourse.

Legal action looms as investigation persists

Disgruntled investors are contemplating legal action against HectorDAO’s developers in response to the ongoing crisis. The team’s lack of transparency and accountability has further eroded investor confidence, prompting calls for greater control over the protocol’s funds.

Originally scheduled for March, compensation payments to investors now hang in the balance as the investigation into the hack continues. Amidst the uncertainty, HectorDAO’s website remains stagnant, with the last update on January 18 confirming the postponement of the redemption process.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.

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Ibrahim Abdulaziz

A fervent advocate, Ibrahim shares his wealth of knowledge on crypto and blockchain technology in an engaging and informative style. He frequents places where influencers gather for his next scoop. His vision is that the decentralized nature, security features, and potential for financial inclusion will drive widespread massive crypto adoption.

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