The Ethereum Foundation will find itself under legal scrutiny over its alleged involvement in the 2016 Gatecoin hack soon. The revelations, put forward by on-chain forensic analyst TruthLabs (@BoringSleuth on X, formerly Twitter), have sparked intense discussions and are now leading to an independent legal investigation.
Ethereum Foundation’s Involvement Will Be Legally Investigated
TruthLabs conveyed the initiation of this probe in a post, asserting, “I received FANTASTIC news tonight that a Law Firm is launching an independent investigation into the Gatecoin hack and the Ethereum Foundation’s involvement due to this post last week.”
This development follows a series of previous posts where TruthLabs accused the foundation and its key figures, including Vitalik Buterin and Joseph Lubin, of being “directly involved in the GateCoin exploit, resulting in the theft of over $450M of ETH.”
He added, “It’s been exactly one week since I shared undeniable evidence that the Ethereum Foundation, Vitalik Buterin, Joseph Lubin were directly involved in the GateCoin exploit […] To date, NOT 1 DEVELOPER OR CRYPTO ANALYTICS FIRM has denied my allegations or even offered up another theory of what might have happened.”
Remarkably, neither the Foundation nor the leaders of Ethereum have responded to the allegations. According to the on-chain sleuth, the reason for this is clear. “They can only ignore the facts, not dispute them. The information has almost 1 million impressions across the internet, and because of it existing in the public domain, the CFTC, DOJ, SEC, Homeland Security will have to act.”
Steven Nerayoff, a former advisor to Ethereum known as “ETH whistleblower”, has also chimed in on the matter, supporting TruthLabs’ allegations. In a response to @BoringSleuth, Nerayoff said, “They relentlessly discredited me before so why are they silent now that specific allegations with receipts or on-chain data have been made by me & @BoringSleuth? Because legal advice for criminals guilty of massive crimes is to remain silent.”
The Alleged Evidence
As Bitcoinist reported, the allegations revolve around a comprehensive analysis of ETH wallet addresses and transaction records, which TruthLabs claims show a direct connection between the Ethereum Foundation and the substantial losses incurred during the Gatecoin hack. This event, which occurred between May 9 and May 12, 2016, preceded the infamous DAO hack.
Official reports from Gatecoin at the time disclosed a loss of 185,000 ETH, an amount now valued at over $450 million. On the potential motive behind the Ethereum Foundation’s alleged involvement, TruthLabs cites financial worries of the Ethereum Foundation at the time of the Gatecoin and DAO hacks.
TruthLabs states that the Foundation’s internal financial forecasts in September 2015 pointed towards an impending monetary shortfall, coinciding with the period of these hacks. “One reason the Ethereum Foundation may have gone on a hacking spree at the time, is because they were on the verge of collapse.”
At press time, ETH traded at $2,207.
Featured image from DALL·E, chart from TradingView.com