While many members of the community supported the well-known programmer, Gabagul confessed to the allegations made against him after the Velodrome investigation.

Velodrome Finance, a marketplace and liquidity marketplace, has announced the return of $350,000 stolen on August 4th. However, the event turned bittersweet when an internal investigation revealed the involvement of a prominent member of the team, known by the alias Gabagul.

On August 4, one of Velodrome’s large wallets, intended for operating supplies like payroll, had $350,000 deducted before it could be transferred to the company’s multi-sig treasury wallet. A subsequent internal investigation revealed the identity of the perpetrator, allowing the company to recover all the loot. An official statement from the Velodrome revealed:

“To our great dismay, we learned that the attacker was a member of Gabagul’s team.”
While many members of the community supported the well-known programmer, Gabagul confessed to the allegations made against him after the Velodrome investigation.

Nearly six hours after the revelation, Gabagul released a memo that revealed the various events that led him to attempt the theft. Velodrome’s biggest mistake was that it leaked its wallet’s private key to five people, including Gabagool.

Gabagul, like many other investors, lost huge amounts of money during the 2022 crypto crash. In an attempt to recoup the losses, Gabagool made a hasty decision to withdraw $350,000 in various cryptocurrencies only to have it converted to Ether (ETH) and sent to Tornado Cash.

Gabagul’s guilty plea to the velodrome theft. Source: Twitter
When Gabagul decided to return the stolen funds, “velodrome investigators showed that they had already discovered my involvement.” He ended the note by saying:

“That’s all there is to it. I’m extremely stupid, incredibly disappointed in myself and (to be honest) legally clueless.”
On the other hand, Velodrome said it is working with legal counsel to determine next steps. Going forward, Velodrome has decided to strip team members of ownership of private keys and instead install Gnosis vaults for all monetary transactions.

Related: BlueBenx fires employees, suspends withdrawals and cites $32m hack

BlueBenx, the Brazilian crypto lending platform, also experienced a hack, but Velodrome Finance was no match for what followed. BlueBenx has reportedly blocked withdrawals for all of its 22,000 users following an alleged hack that cost $32 million.

Although no details about the hack were released, many investors were surprised by the matter, with one saying:

“I think there’s a good chance it’s a scam because the whole hack thing looks like a bunch of crap they made up.”
The lack of investor confidence comes as many crypto platforms have recently suspended payouts to hide their inability to deliver previously promised returns to users.

Source: CoinTelegraph

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