Algorand (ALGO) Investing Project Lost Funds in Hot Wallet Attack
One of the mobile-based wallets of Algo Capital CTO Pablo Yabo was compromised, leading to losses up to $2 million.
Algo Capital may have lost between $1 and $2 million from the hot wallet of CTO Pablo Yabo. The investment startup based on the Algorand (ALGO) project announced the loss over the weekend.
Reportedly, Yabo’s mobile phone was compromised, allowing hackers to drain a certain amount of Tether (USDT) from the hot wallet. ALGO tokens were also stolen. The losses were covered by the General Partners in the investment project, while most ALGO held in the fund’s accounts is held with Coinbase Custody. Algo Capital announced it would issue a formal statement soon:
After the hack, Yabo announced he has resigned from the investment arm of the project:
Following the hack, Algo Capital reimbursed its investors. The Algorand project also pointed out that the investment arm worked separately from the Algorand Foundation and the core project, and the breech did not affect other aspects of the network.
Unfortunately, the latest breech generated confusion and contaminated the brand of Algorand, as social media users noted. The relatively small breech failed to affect the ALGO price, which is already quite depressed at $0.21, far from highs above $3. ALGO was one of the most ambitious projects, aiming to create a new economic model through open staking, but failed to perform well on the open market.
Algo Capital was built with the central idea of investing in projects within the Algorand ecosystem. At the end of August 2019, Algo Capital raised a round of $200 million for that purpose. The investment round was backed by multiple blochchain venture firms, including Brainchild, NGC Ventures (the venture arm of NEO Global), Arrington XRP Capital, Eterna Capital, GSR, Cognitive Blockchain, Rokk3r Inc, Wibson, 11-11 Ventures, DG Ventures, Winslow Strong, Invermaster.