Algo Capital, a venture capital investment fund and developer of the Algorland blockchain ecosystem, reported the loss of roughly $1-2 million worth of USDT and ALGO tokens to a group of unidentified hackers. Today, the CTO of Algo Capital admitted his responsibility for the loss of funds and confirmed his departure from the company.
The funds were stolen from an Algo hot wallet administered by the company’s CTO, Pablo Yabo. Cybercriminals were able to get access to it by compromising Yabo’s mobile phone last Friday, October 4, as reported by a source familiar with the matter.
The same day, CEO Algo Capital David Garcia confirmed the security breach to all the Algo Capital VC Fund Limited Partners, while assuring them that the Algorand network itself remained unscathed.
Subsequent to the incident, Pablo Yabo apologized to investors in a Medium post and stated that he takes “responsibility for this and thus will be personally covering most of the stolen funds and the rest will be covered by Algo Capital General Partners.” He also confirmed his resignation from Algo Capital:
“I have decided to focus entirely on Randlabs.io to do what I love most: build tools and software that increases the adoption of blockchain technology,” - he explained.
Algo Capital previously raised $200 million for its Algo VC Fund, with the cash intended to support projects in the Algorand economy. The Algorand blockchain was first envisioned by MIT professor Silvio Micali in 2017 as a possible solution to the scaling issues other blockchains face. Under its consensus mechanism, the network randomly selects the machines which add the next blocks to the blockchain, as a variant of the proof-of-stake mechanics.