Web3 is Going Just Great

Now, another $2.7 million is gone after an apparent thief was able to exploit a smart contract that was intended to distribute payouts to Hector's token holders. They then swapped the tokens from the USDC stablecoin to ETH.

Investors in the project are furious, especially because various parties had warned Hector Network about apparently insecure practices. Hector Network's team, meanwhile, have not acknowledged the theft, although a law firm involved in the project liquidation promised a statement would be forthcoming.

A little over 700 victims were affected, and the highest loss from a single wallet was around $657,000. 121 wallets lost assets priced at more than $10,000.

On January 23, the protocol announced they had recovered 1,032 ETH (~$2.23 million) of the stolen funds.

The bug was fixed about a week later. There has been a dispute since then between Harmony employees and a consultant who was involved in identifying the bug, and the consultant has been accused of delaying action to profit from the excess tokens. The consultant also balked at destroying some of the tokens he mistakenly received.

The consultant claims that he didn't profit from the bug, and objected to a Harmony employee coming after him to destroy the excess tokens when he'd done little towards others who profited from the error. He did, however, say later that he had destroyed the tokens.

According to the consultant, a Harmony employee claimed that he had filed reports to the FBI and IRS about the consultant's behavior, and had the consultant banned from the annual ETH Denver event.

With the malfunctioning hardware wallet and no recovery key, Bentley has lost access to assets including 1.2 million EUL tokens — over 4% of the total EUL token supply. These tokens are priced at about $3.8 million today, though at other times the tokens would have been worth up to about $15 million.

"I've now lost a substantial percentage of the crypto assets I held in cold storage, accumulated over more than seven years, including the majority of the EUL allocated to me for participating in Euler governance," said Bentley.