On May 10, nonfungible tokens (NFT) financialization protocol ParaSpace published several alleged irregularities linking its CEO, founder, and CTO Yubo Ruan to the mismanagement of 2,909 Ether recovered via a white-hat interception on March 18.
Ruan denied any misconduct, writing: “manufacturing claims intending to seize control and compel me to resign as CEO. This is extremely problematic, and legal action has been taken.”
On or around March 18, ParaSpace experienced a price-slippage exploit that was swiftly fixed. Coincidentally, the blockchain security company BlockSec thwarted the attack. It removed 2,909 ETH from the protocol before malicious actors obtained the funds and returned the assets to ParaSpace staff.
Paraspace said Ruan had “exclusive control and management” over some of the returned protocol funds. Subsequently, developers asserted that a portion of the 2,909 ETH believed to be under Ruan’s control had “not been fully returned to protocol, with over 50% initially unreturned, leaving a hole in the protocol’s treasury.”
The development team also asserts that these assets had “outflown to various unknown wallets as well as out to CEXs and Circle redemptions,” totaling $1 million.
“As a result, the team has come together, secured the protocol’s multi-sig, and removed Yubo as well as any addresses not directly controlled by the team.”
Through its Twitter account, ParaSpace demands that Ruan “step down from his roles as CEO and CTO.”
Ruan claims that two former ParaSpace consultants, Thomas Schmidt, and Jay Yao, listed as the protocol’s COO and CBO, respectively, “have illegally obtained control of one of the protocol’s multisig and social media accounts” through misrepresentation.
Ruan stated that following the reception of rescued funds from BlockSec, a structured redeposit procedure was agreed upon and phased out “by myself, Thomas, Jay, and other key engineering stakeholders.” The CEO penned:
“To date, following the schedule, all of the hacker’s debt has been deposited back into the hacker account. The residual amount has already been paid back in full according to schedule. The mischaracterization by them is absurd, and I have nothing to hide.”
