Interpath Ltd Assumes Control over Hacked HectorDAO's Treasury and Social Channels
Summary:
Insolvency advisory firm Interpath Ltd has taken full control of the treasury of the hacked HectorDAO and its social media channels as of February 21. After HectorDAO's $2.7 million loss in January, allegedly caused by a rogue developer or private key compromise, several investors demanded a neutral third party's intervention. Appointed by the Virgin Islands High Court, Interpath Ltd will conduct an investigation into the January breach and aims to retrieve the investors' finances. The firm has now assumed full authority over the treasury assets. However, court approval is needed to distribute the funds.
As of February 21, the full control over the treasury of Hector decentralized autonomous organization (Hector DAO) along with its social media channels have been assumed by insolvency advisory firm, Interpath Limited, popularly known as "Interpath Advisory". This step was taken so that the firm can streamline communication with the investors, as per details available from the protocol’s Telegram channel updates posted on Feb 19 and 21. HectorDAO experienced a security breach in January involving a loss of $2.7 million, speculation points towards an internal sabotage or private key compromise. Post this event, many investors directed the blame towards the development team and demanded the assets to be transferred to an unbiased third-party.
Quoting from the Feb 19 announcement, "Virgin Islands High Court (Commercial Division), Eastern Caribbean Supreme Court have appointed Mr Drury and Mr Pretlove from Interpath (BVI) Limited as the interim receivers for all Hector DAO assets." Interpath's name is listed under the British Virgin Islands Financial Services Commission as a regulated insolvency firm. This suggests that the funds will now be handled by professional liquidators, moving it away from the HectorDAO team's control.
Interpath's take over also extends to the protocol's social media channels. According to the announcement, "The communication channels of Hector Network are under the control of the Receivers who will provide further information regarding their next steps and ways for token holders to express their concerns or get clarity on the appointment process." Before this announcement, the channel's last update was on January 2, prior to the $2.7 million security breach.
Interpath also plans to investigate the January hack and make efforts to retrieve the investors’ finances. In an email response to Cointelegraph, the company's director, James Drury, confirmed the authenticity of the post.
As per an additional post on Feb 21, "The receivers have now assumed full authority over the Treasury assets which have been shifted to a newly secure wallet". The old wallet housing the funds has also been taken over, while the previous signatories have been removed from the multisignature wallet. None of these older signers will be taking part in the new wallet, which suggests that the HectorDAO team no longer holds the power to authorize treasury transfers.
Although the firm now has the power to collect and preserve HectorDAO assets, it hasn't yet received the authorization to distribute the funds. The court's final approval remains a necessity for Interpath to distribute the funds.
Last year in July, HectorDAO suffered a heavy loss amounting to over $8 million due to the depreciation of some of its tokens on Fantom from their Ethereum collateral. Multichain's $1.5 billion exploit led to the closure of the Multichan Fantom bridge on July 14, causing the large scale loss. That same month, DAO's decision was to liquidate the treasury and return the funds to the investors. Still, a majority of the funds remain undistributed.
Published At
2/23/2024 3:00:00 AM
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