CTO phone is hacked, Algo Captial loses millions of cryptocurrencies

According to CoinDesk's October 6 report, Algo Capital, an investment company focused on the Algorand blockchain, has lost millions of dollars worth of USDT and Algo tokens after its CTO's cell phone was hacked.

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According to people familiar with the matter, Algo Capital reported to its partners last Friday that the company’s chief technology officer Pablo Yabo’s cell phone was attacked and that the attacker controlled Yabo’s Algo hot wallet. An email from the company's chief executive, David Garcia, revealed that about $1 million to $2 million in cryptocurrencies were stolen.

David Garcia tells CoinDesk in an email:

The cryptocurrency was stolen this time due to a security hole in the Algo hot wallet. We communicated with all partners of Algo Capital Venture Capital and informed them of the latest developments.

According to sources, the Algo network has not been affected. The Algorand team is also aware that the investment company has been attacked.

Earlier, Algo Capital has raised nearly $200 million for its venture capital fund, which will be used to support Algorand-related projects. Arul Murugan, founder and managing partner of Algo Capital, said in a statement in August 2019:

Our investment is specifically targeted at companies that are creating the next great blockchain application and infrastructure solution, so we will help accelerate the adoption of blockchain and bring millions of new users to the Algorand network.

The investment company is an entity independent of the Algorand Foundation and Algorand LLC, which oversees the actual development of the Algo blockchain. Pablo Yabo has resigned based on emails sent to partners by Algo Capital. The company has also taken further security measures. It is reported that most of the company's funds are placed in the cold wallet, and no impact has been received.

Algo Capital stated that it will assume full responsibility for the loss and promised to make full compensation within 20 months. Garcia wrote:

We are working with a number of key organizations and security services to address common problems in this industry.

In 2017, as a potential solution to the expansion problems faced by other blockchains, MIT professor Silvio Micali first conceived the Algorand blockchain. The consensus mechanism is a variant of Proof of Entitlement (PoS), and the Algo network will be randomly selected. A machine that digs out new blocks.

Yabo did not respond to requests for comment from reporters.