Yet when the crowd sale opened on April 30 th, it took in $9 million in just the first two days, with participants exchanging one ether for 100 DAO tokens. ’s team thought The DAO might attract $5 million. It had been created by a company named, which, instead of seeking traditional venture capital, had decided to create this DAO and then open it up for crowdfunding-with the expectation that its own project would be one of those funded by The DAO. In early 2016, the Ethereum network was not even a year old, and there was only one app on it that people were interested in: The DAO, a decentralized venture fund built with a smart contract that gave its token holders the right to vote on proposals submitted for funding. Always.”) Looked at from that perspective, this is also a tale of the big brains and big egos that drive the crypto world–and of a hacker who may have justified his actions by telling himself he simply did what the faulty code baked into The DAO allowed him to do. (One of his TenX cofounders, Julian Hosp, an Austrian medical doctor who now works in blockchain full time, says of Hoenisch: “He is a person that is super opinionated. Since Hoenisch won’t talk to me, I can only speculate about his possible motives back in 2016 he identified technical vulnerabilities in the DAO early and may have decided to strike after concluding his warnings weren’t being taken seriously enough by the creators of the DAO. But as new applications arise, one of the first uses of crypto-as an anonymity shield-is in retreat, thanks to both regulatory pressure and the fact that transactions on public blockchains are traceable.Ĭofounders Toby Hoenisch and Paul Kittiwongsunthorn in Thailand in 2018 during a TenX strategy session. Today, blockchain technology has gone mainstream. Indeed, the story of The DAO and the six-year quest to identify the hacker, shows a lot about just how far the crypto world and the technology for tracking transactions have both come since the first crypto craze. Last year, as I was working on my book, my sources and I, utilizing (among other things), a powerful and previously secret forensics tool from crypto tracing firm Chainalysis, came to believe we had figured out who did it. That means the descendant wallets of the DarkDAO now hold more than $100 million in ETC-a high dollar monument to the biggest whodunnit in crypto. The proponents of the fork had hoped ETC would die out, but it now trades around $30. The DAO theft famously and controversially prompted Ethereum to do a hard fork-where the Ethereum network split into two as a way to restore the stolen funds-which ultimately left the DarkDAO holding not ETH, but far less valuable Ethereum Classic (ETC). To put the enormity of this hack in perspective, with ETH now trading around $3,000, 3.64 million ETH would be worth $11 billion. After being sent a document detailing the evidence pointing to him as the hacker, Hoenisch wrote in an email, “Your statement and conclusion is factually inaccurate.” In that email, Hoenisch offered to provide details refuting our findings-but never answered my repeated follow-up messages to him asking for those details.
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