The DAO smart contracts hack
Occurred: June 2016
In a new book, crypto journalist Laura Shin Shin names then Singapore-based Austrian national Toby Hoenisch as responsible for the notorious June 2016 hack of The DAO, and theft of 3.6 million ETH off the Ethereum DAO.
Self-confessed 'thrill seeker' Hoenisch is a former CEO of cryptocurrency payments company TenX. TenX ceased operations in January 2021 before morphing into Mimo Capital.
Launched in April 2016, The DAO was an automated quasi-venture capital investment fund with no known management structure based on a digital decentralised autonomous organisation that operated on the Ethereum blockchain.
The DAO raised USD 150 million in what was then the largest crowdfunding campaign, and was seen by enthusiasts as a revolutionary way to manage organisations of all kinds. And to make money.
TechCrunch technology investor contributor Seth Bannon described The DAO as 'a paradigm shift in the very idea of economic organization. ... offer[ing] complete transparency, total shareholder control, unprecedented flexibility, and autonomous governance'.
Others were more sceptical. The Economist described The DAO as sounding 'like a cult'.
The DAO ceased operations in September 2016.
A 2017 SEC investigation concluded 'The automation of certain functions through this technology, ‘smart contracts’ or computer code, does not remove conduct from the purview of the U.S. federal securities laws.'
Operator: The DAO; Slock.it; Bity SA; Ethereum Foundation
Developer: The DAO; Slock.it
Country: USA; Global
Sector: Banking/financial services
Purpose: Automate financial contracts
Technology: Blockchain; Virtual currency
Transparency: Governance; Marketing
Investigations, assessments, audits
News, commentary, analysis
Published: February 2022