Former Crypto CEO Denies Responsibility for $11 Billion Ethereum DAO Hack

By Mat Di Salvo

A former cryptocurrency startup CEO has denied stealing an Ethereum stash that today would be worth more than $11 billion, allegations made against him in an article published by Forbes.

Journalist Laura Shin has accused Toby Hoenisch, co-founder and CEO of crypto debit card company TenX, of being behind the 2016 hack of The DAO—one of the largest cryptocurrency hacks ever.

The DAO was one of the world's first decentralized autonomous organizations, serving as an open-source venture fund platform for crypto projects. It raised 12.7 million ETH, worth around $150 million at the time, from crowdfunding.

When it was hacked in 2016, someone siphoned off nearly a third of the project's funds. Shin, in a joint investigation with blockchain analytics firm Chainalysis, tracked the movement of the stolen funds, which she says led her to Hoenisch.

Hoenisch denied the allegations in Shin's article, reportedly telling her that her "statement and conclusion is factually inaccurate." Neither Shin nor Hoenisch immediately responded to requests for comment from Decrypt.

According to Shin, whoever hacked The DAO swapped the stolen Ethereum for Bitcoin, and then sent the Bitcoin to a Wasabi Wallet, which is used to obfuscate Bitcoin transactions—a process called "mixing." But Chainalysis was able to "de-mix" the transactions and trace them to four different exchanges.

It was there, alleges Shin, that evidence showed someone had exchanged the Bitcoin for the privacy coin Grin, which was withdrawn to a non-custodial Grin node called "grin.toby.ai."

The name "toby.ai" was used by Hoenisch on various social media accounts, and was one of his email addresses, Shin wrote. The IP address hosting that node also hosted another node called "TenX"—the name of Hoenisch's company.

TenX shut down after raising $80 million in an initial coin offering (ICO) because its card issuer, Wirecard, filed for insolvency. It has since been rebranded as a stablecoin project, Mimo Capital.

"As I noted earlier," Shin wrote, "after being sent a document laying out the evidence that he was the hacker and asking for comment for my book, Hoenisch wrote that my conclusion is 'factually inaccurate.'"

According to Shin, Hoenisch was clued-up on The DAO's code and had written blog posts warning about potential hacks. 

Shin said she researched the hack for her new book, "The Cryptopians: Idealism, Greed, Lies, and the Making of the First Big Cryptocurrency Craze," which debuted today.

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