Teenager stole $ 16 million from DeFi protocol and will fight in court
Last week, the DAO-ruled indexed DeFi protocol lost around $ 16 million in cryptocurrency in an attack on a teenage student in Canada, who now refuses to return the money. This case could set an industry precedent.
At stake is the role of law enforcement in an unregulated industry, which is now worth $ 220 billion according to data from CoinDesk. When to contact the authorities, if any?
On October 14, Indexed’s official Twitter account reported an error regarding its cash pools. Almost half of the protocol’s $ 34 million value has been lost.
During the Indexed team’s investigation, they believe they identified the author, an 18-year-old math genius named Andy. He had been in contact with Laurence Day, a member of the Indexed team for months. In a tweet (supposedly from Andy), he thanked his followers and fans and asked for recommendations from an attorney experienced in cryptocurrency matters.
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A test of “the code is law”
If the case goes to court, it could test “the code is the law”. This phrase is common in DeFi circles and points to the following line of thinking: In the absence of regulation, one man’s feat is another’s job. The protocol brought together a so-called “combat” team. Members include Lefteris Karapetsas, founder of Rotki, Julien Bouteloup, contributor to Curve, and Banteg, main contributor to Yearn.Finance.
The team issued an ultimatum: return the money or we will report you to law enforcement. Such threats have been proven in the past. According to Dillon Kellar, principal contributor to Indexed:
Once he made it clear that he wasn’t going to give up, that he didn’t care, we found this overwhelming evidence on him, at that point we had a tough decision because if we were going to just to law enforcement, if we kept that information to ourselves, we are effectively taking charge of the situation ourselves, and we couldn’t do it.
Other DAO members may decide to pursue compensation in civil court, individually or collectively. If the team does not disclose Andy’s personal information, it could prevent him from doing so, prompting a moral argument in favor of law enforcement. Laurence Day said in an interview with CoinDesk:
We’re not comfortable with the idea of publicly doxxing, but Indexed isn’t a legal entity – it’s a DAO. And Dillon and I don’t have the right to own that information alone, or to own the legal battle. This is a cornered response.