Velodrome Recovers $350K Stolen Money From Their Own Gabagool

Velodrome recovers $350K of stolen money from the unlikeliest of hackers, their own team member with the alias Gabagool. Even though the well-known coder received a lot of community support, after Velodrome’s inquiry, Gabagool admitted to the accusations made against him.

A trading and liquidity platform called Velodrome Finance said on August 4 that it had recovered $350,000 that had been stolen. Internal investigations revealed that a well-known team member who goes by the alias Gabagool was involved, turning the event into a bittersweet one.

Velodrome Recovers $350K Stolen Money

On August 4, $350,000 was taken out of one of Velodrome’s high-worth wallets, which were intended for operations money like salary, before it could be moved to the business’s treasury multisig wallet. The attacker’s identity was later made known through an internal inquiry, enabling the business to reclaim all of the stolen goods. The official announcement from Velodrome showed:

“Much to our disappointment, we learned the attacker was a fellow team member Gabagool.”

Even though the well-known coder received a lot of community support, after Velodrome’s inquiry, Gabagool admitted to the accusations made against him.

An update from Velodrome on our investigation into the team wallet exploit. pic.twitter.com/sz1ePStcT0

— Velodrome (🚴,🚴) (@VelodromeFi) August 13, 2022

Almost six hours after the discovery, Gabagool published a message outlining the many circumstances that prompted his heist attempt. The largest error Velodrome made was to provide over the private key of its wallet to five people, one of which was Gabagool.

Like many other investors, Gabagool suffered significant losses during the 2022 crypto meltdown. Gabagool took the impulsive decision to withdraw $350,000 in various cryptocurrencies in an effort to recover losses, only to convert it to Ether (ETH) and transfer it to Tornado Cash.

Investigators from Velodrome “indicated they had already identified my involvement” by the time Gabagool made the decision to refund the stolen money. He said at the note’s conclusion:

“Not much else to say. I’m extremely stupid, incredibly disappointed in myself and (frankly) unsure about what next, legally speaking.”

On the other hand, Velodrome acknowledged consulting with legal counsel to decide the next course of action. Velodrome will no longer allow team members to possess private keys going forward and will instead use gnosis safes for all financial transactions.

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Although BlueBenx, a Brazilian cryptocurrency lending site, also had a breach, the consequences were unmatched by Velodrome Finance. According to reports, BlueBenx stopped allowing any of its 22,000 members to withdraw money after an alleged cyberattack that stole $32 million.