Algo Capital Loses Millions After CTO's Phone is Hacked
Algo Capital, an investment firm based on the Algorand blockchain, lost a few million dollars in USDT and ALGO tokens after the chief technology officer’s personal device was breached.
Algo Capital announced Friday to its limited partners that Pablo Yabo, its CTO, had mobile phone compromised that allowed attackers to take control of Yabo's Algo hot wallet. As a result of the hack, roughly $1 million to $2 million in the cryptocurrencies were lost.
The network remains unscathed however. The Algorand team is aware of the investment firm's violation, a source said.
For its Algo VC Fund, Algo Capital has raised $200 million, with the cash to support Algorand economy ventures. In a statement issued in August 2019, Algo Capital founder and managing partner Arul Murugan said:
The investment firm is a separate entity that oversees the actual development of the blockchain from the Algorand Foundation and Algorand LLC. According to email sent to partners, Pablo Yabo resigned his position. The company has taken additional security measures. Most of the company's funds were held in uncompromised cold wallets.
The company assumes full responsibility for the loss and is commited to refund the full amount within 20 months. "We are collaborating with some key organizations and security services to cooperate and address this issue that has become a common problem for the industry," wrote Garcia.
In 2017, MIT professor Silvio Micali first conceived the Algorand blockchain itself as a possible solution to the scaling problems facing other blockchains. Based on the consensus mechanism, a variation of the proof-of-stake system, the network randomly selects the devices that add the next blocks to the blockchain.