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The investigation team at Velodrome Finance discovers the involvement of a former employee in the theft of $350,000 from the company’s wallet. The Velodrome is the Optimism Network’s central trading and liquidity marketplace.

It is based on Andrew Cronje’s Solidly Exchange model and had reached $100 million in total value locked on the Optimism Network in July.

On August 4, the company revealed via Twitter that a “team-owned wallet” in charge of managing operational expenses, including salaries, had been depleted of $350,000 in funds. The theft occurred prior to the money in the wallet being transferred to a multi-signature wallet in the company’s treasury.

Internal investigations have since identified the perpetrator.

Former Velodrome Finance Team Member Accused of Malpractice by Clients

An official statement shared, “Much to our disappointment, we learned the attacker was a fellow team member, Gabagool.” The ex-employee was one of five members to possess the wallet’s private key – something which Velodrome soon regretted very much.

He said he had moved the $350,000 out of the wallet and turned it all into the ether before sending the money to Tornado Cash.

The US Treasury has recently sanctioned Tornado Cash for hosting money laundering schemes. Through the platform, it was possible to transfer funds without revealing one’s identity—something Gabagool took advantage of.

Gabagool Admits to His Wrongdoing 

Gabagool posted an apology note on Twitter nearly six hours after the discovery, delving deeply into the events that led to his dishonest behavior. Like many other investors, his funds had withered in the 2022 cryptocurrency crash.

This harmed his mental health, so he attempted to steal to recoup all the money. His conscience, however, writhed in “shame, panic, and remorse,” prompting him to return most of the funds. The relevant members had already caught up with his misconduct when he decided to come clean.

Velodrome Issues Orders to Regain Control

Velodrome has removed private key ownership from its team members and intends to use gnosis safes for its monetary options instead. Gabagool, for his part, will no longer be associated with the company and is likely to face civil litigation, if not criminal charges, in the near future.

Velodrome recovers $350K from Gabagool Team

During the last week, Velodrome Finance, a liquidity and trading platform, contended the retrieval of $350k stolen. Still, the occasion became bittersweet as internal probes indicated the participation of a significant team member known by the alias Gabagool.

Gabagool issued a message almost six hours into the disclosure, documenting the occurrences that pushed him to try stealing. Velodrome’s most destructive mistake was entrusting the secret key to five persons, including Gabagool.

Gabagool, like other traders, lost many funds during the 2022 cryptocurrency meltdown, taking the impulsive decision to withdraw $350k in various cryptocurrencies, only to convert it to Ether and move it to Tornado Cash in an attempt to recover losses.

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