Crypto Marketplace Claims $350,000 Stolen by Insider ‘Gabagool’
- The team has cut ties with the attacker after the theft
- The employee, the company said, freaked out and said he was mentally affected by losing money in the crypto crash
A crypto-liquidity marketplace is dealing with the aftermath of an alleged inside job involving stolen funds by one of its own.
Velodrome Finance, a market maker in the Optimism ecosystem, has been trying to find out what happened since the firm discovered a significant some of the funds are missing about two weeks ago. On August 4, a team-owned wallet used for operating expenses — including salaries — was suddenly compromised to the tune of about $350,000.
The funds have since been recovered.
Velodrome said on a Friday Update that the attacker managed to drain the funds before the team could transfer the remaining assets to a treasury multi-signature wallet. While the funds have now been recovered, the team’s identification of the attacker was troubling.
Representatives of the marketplace identified the culprit as an employee who goes by “Gabagool.” The identity of the employee, as well as his or her role, was not disclosed.
The crypto community did not take kindly to the revelation, either one Twitter user points to a Vice interview with Gabagool warning against crypto scams.
“And he ends up being a fraud himself,” the user wrote.
Gabagool admitted to transferring $350,000 from Velodrome’s funds, saying he exchanged it all for ether and then sent it to Tornado Cash – a platform used to hide the origin of funds. The US Treasury Department recently sanctioned Tornado Cash in an unexpected move alleging money laundering.
One of the former employees tweets revealed to Gabagool that he was mentally affected by losing a significant amount of money during the recent downturn in the cryptocurrency market.
“I did this in a pathetic attempt to solve my own problem, to get out of a trap of my own making,” he said, adding that his idea of returning the money was “delusional.” He claimed he returned most of the funds after being overcome with guilt.
“I own the bad decisions I made and take responsibility for my actions,” he wrote.
Velodrome said it has cut ties with Gabagool and is working with lawyers on next steps. It is not clear whether he could face criminal charges, in addition to likely civil lawsuits.
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Shalini Nagarajan
Blockwork
Journalist
