The founder of the Tangle-based blockchain startup Oyster Pearl has reportedly stolen over USD 300,000 of Oyster Pearl tokens (PRL) by taking advantage of a smart contract vulnerability, according to current CEO William Cordes. The funds were sold on the Kucoin exchange.
There is a split in the project between Bruno Block, accused of stealing USD 300,000, and Cordes. Block has since released Telegram group chats which reveal some of the uglier aspects of the cryptocurrency industry, including Cordes selling all of his PRL tokens and refusing to hire badly needed developers.
Cordes has also revealed more detailed Telegram chat logs in response, where Block can be seen admitting to stealing the funds and indirectly indicating that he was entitled to do so. Block has not denied stealing the funds but has only responded by pointing out some of the wrongdoings of Cordes.
Oyster Pearl, insider trading, and an anonymous founder
What is unusual about this hack is that the real identity of Bruno Block is unknown, even to the current CEO William Cordes, who has worked with this person for over ten months. –
“We are also interested in obtaining any information that folks may have around Bruno’s potential identity. Despite working alongside him for the last ten months, Bruno has always maintained his anonymity. After I took over the CEO role, Bruno’s activity within the project dropped off sharply.”
It is claimed by Cordes that Block stole the coins to avoid the new KYC policies that are due to be implemented today, November 1st. In response, Block took to Telegram and accused the CEO of insider trading, warned of an imminent financial collapse, criticized the Tether stable coin, and called cryptocurrency investors fools. He also promised to continue working on a new version of the Oyster Pearl project, indicating he will be revealing his true identity over the next few days and is firing the CEO.
“I advise all of you to get out of crypto. Go educate yourselves about what is happening with Tether. The entire crypto sphere is a giant Ponzi scheme. I warned all of you, multiple times, in private and public, and nobody listens. Ethereum is going back to $5, if you want to sell back to a greater fool then you will only find yourself to be that fool.”
Block then unveiled Telegram chat logs of conversations with William Cordes, who stated that “Insider trading does not exist in this market [yet]” and that ”it will take a year to get that regulation in place.” Among other things, Block and Cordes both believe the market is going to crash, with Block indicating that BTC will go under USD 20.
The chat also revealed that Block wanted Cordes to hire new developers, but instead, Cordes took a 2-week vacation and sold all of his PRL tokens. Notably, Block did not respond to the accusation of having exploited the smart contract and stealing user funds but proceeded to reveal conversations between him and Cordes. Block also mentioned that development has been rendered more difficult because the price of ETH dropped since the project started.
What is going on with Oyster Pearl?
It is hard to say for certain what is going on with Oyster Pearl. Judging from the updates, it seems that Block did steal the funds via the smart contract vulnerability which he programmed himself. But it also seems that Cordes engaged in insider trading, and like Block, has no faith in the cryptocurrency market. The Telegram chats indicate that Cordes refused to hire new developers, saying it should be left “to the big boys,” showing he had no respect for Block. Both Cordes and Bock have released their version of events, and both seem to be guilty of some form of malfeasance.
But while Cordes appears somewhat professional, Block believes that the world is going to end, that a crash is imminent, and that he is fully justified for stealing the funds because crypto is ”nearly dead already.” The Tether stablecoin was crashing, and that was going to take the whole cryptocurrency market with it (Tether has since actually regained parity with the dollar). He blamed prior generations for creating fiat debt which his generation is now responsible for dealing with, using rhetoric that can best be described as immature in light of conducting a clearly criminal activity –
Block: “I always had the interests of our holders in mind”
Cordes: “You had yourself in mind”
Block: “Yes, I did. And your credit card swiping parents created a massive debt bubble prison which I’m trying to escape from. I only wanted to protect my wife and children from the economic collapse that is coming any day now.”
All in all, the whole project appears completely poisonous. Oyster Pearl was intended to be a Tangle-based data storage system, and the CEO remains positive about the outlook of the project. But the price has tanked, and it is very difficult to see how investors could remain confident in such a toxic environment.