Business magazine Forbes has published an exclusive crypto research that is making waves. It purports to show that the DAO hack on Ethereum from 2016 has now been solved. The trail leads to TenX founder Toby Hoenisch.
Watch out, you’re about to read a crypto story fit for a movie. In a leading role we see Toby Hoehne, known as the founder of TenX. In the second lead role we can admire the notorious Julian Hosp. The subject is the DAO hack on Ethereum (ETH) from 2016, at the time probably the biggest and most spectacular hack of its time. And don’t worry: If the names don’t mean anything to you, we’ll provide important background information. So curtains up on an exclusive investigative story published at Forbes business magazine by crypto expert Laura Shin.
Act One: The DAO Hack on Ethereum.
Back in Ethereum’s (ETH) second year, a sort of early DeFi project excited investors in 2016. The DAO promised to collect Ethereum and then follow majority investor decisions to put capital back into promising and profitable DeFi projects. The concept was revolutionary for its time and the invested sums literally exploded. By the end of May 2016, when the investment period ended, The DAO had attracted about 15 percent of all ETH circulating at the time, from about 15,000 people and worth more than $150 million at the time. Ethereum founder Vitalik Buterin also participated, and ETH’s price curve, driven by The DAO, seemed to know only the upward direction.
But on June 17, 2016, it became clear that earlier warnings of flaws in The DAO’s smart contract were justified. An attacker had managed to withdraw 3.6 million ETH, or one-third of the capital, from the project and transfer it to a smart contract that he or she controlled, not The DAO. 28 days later, it would then have been possible to freely move the captured ETH and thus turn it into cash. This emergency situation for Ethereum resulted in a hard fork, where ETH rolled back the blockchain to absorb the damage. Those who held on to the invulnerability of the blockchain then rallied to Ethereum Classic (ETC), where the spoils from the DAO hack continued to have value.
Act two: new analytics tools lead to suspected DAO hacker Toby Hoenisch in 2022
While researching a book, crypto journalist Laura Shin had now come across new sources and ways to freshly unravel the search for the DAO hacker. The two data services Coinfirm and Chainalysis helped. It was known that some of the loot in Ethereum Classic was exchanged for Bitcoin (BTC) at the crypto exchange ShapeShift. These BTC were then “laundered” through a Bitcoin mixer called Wasabi, so would have been untraceable earlier. But a new method from Chainalysis, now made public for the first time, provided Laura Shin with details. The path of bitcoin leading back to the DAO hack took the BTC to four crypto exchanges, where they were swapped to the early privacy coin GRIN.
A source at one of the crypto exchanges revealed to Laura Shin that these trades pointed to the Grin node grin.toby.ai. With the IP address, Shin was also able to track down other linked nodes such as ln.toby.ai and lnd.ln.toby.ai. Toby.ai – wasn’t that something? Yes, that’s what TenX founder Toby Hoenisch calls himself not only on Twitter. And hadn’t Toby Hoenisch already warned about security gaps before the DAO hack? Yes, he had, and demonstrated considerable expertise in the process. The nickname @tobyai was his trademark on all networks, and a trail also led to an Amazon cloud account in Singapore, where Hoenisch lived and where the nodes in question were running. In addition, emails to crypto exchanges with @toby.ai were available.
Laura Shin contacted Toby Hoenisch, who, according to her account, denied the connections and promised to help clarify the matter. But then Hoenisch was no longer available to her. Even now, after the Forbes report, Hoenisch remains silent, and he has largely deleted his word reports from many years on the Internet.
Third act: Julian Hosp as “key witness” in research on Toby Hoenisch and DAO Hack
Julian Hosp is not exactly a person you want to rely on as a crypto journalist. Many of his projects have been too opaque, and his most recent, Cake DeFi, has prompted investigations by authorities in Germany. But Julian Hosp has also been with TenX from the beginning and should therefore know Toby Hoenisch well. So Laura Shin asked Julian Hosp for an interview and was given hours of clues. She explained to Hosp her theory that Toby Hoenisch had been the DAO hacker. And suddenly Hosp’s own memories about Hoenisch made sense. Toby Hoenisch’s huge interest in the Privacy Coin GRIN. Hoenisch’s knowledge of the DAO hack, which he tried to expand almost manically. Earlier chats in which Hoenisch is enthusiastic about positive price curves at ETC. Of course, also the email addresses with @toby.ai.
In short, Julian Hosp actuated evidence, conjecture and even gave his own hints to Laura Shin. He doesn’t want to commit to Toby Hoenisch on the DAO hacker, but he thinks this version is very possible. On Twitter, Hosp has currently also commented in detail. And for all the criticism of Julian Hosp, which is also justified from our point of view: When we critically researched TenX in December 2021 and what actually happens to the capital collected there, Julian Hosp supported us and disappointedly stated that Toby Hoenisch had disappeared.
Curtain up, the conclusion: DAO Hack – what does Toby Hoenisch do?
The absolutely recommendable original text at Forbes has even more details ready than our summary. We have already dug up some juicy details about all the main players in this unbelievable story several times in the past, and we certainly wouldn’t put our hand in the fire for Toby Hoenisch. What Laura Shin has gathered for her book and Forbes about the DAO hack meets serious standards and is convincingly combined. At the moment, probably only Toby Hoenisch could exonerate himself. Until then, the DAO hack now has a face.
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