Court-appointed bankruptcy firm takes over HectorDao after $2.7M embezzlement

Insolvency consulting firm Interpath Limited has taken full custody of the treasury of Hector Decentralized Autonomous Organization (Hector Dao) effective February 21. The company, also known as “Interpath Consulting,” has taken over Hector's social media channels, planning to talk to prospective investors, according to announcements on the protocol's Telegram channel posted on February 19 and 21.

HectorDao was hacked for $2.7 million in January, which analysts described as either a private key deal or the work of a rogue developer. Since then, some DAO investors have blamed the development team and argued that the assets should be handed over to an independent third party.

According to the February 19 announcement, “Mr Drury and Mr Pretlove both of Interpath (BVI) Limited […] The High Court of the Virgin Islands (Commercial Division), Eastern Caribbean Supreme Court has been appointed as joint and several provisional receivers (receivers) in respect of all assets held by or on behalf of Hector DAO.

The Financial Services Commission of the British Virgin Islands lists Interpath as a regulated entity and an insolvency practitioner, indicating that the funds have been transferred to professional liquidators and are no longer held by the Hectordao Group.

Interpath has also taken over the protocol's social media channels, the announcement said. “The receivers will control the communications channels of the Hektar network and provide more information on how to contact the receivers to discuss any concerns about the next steps and token holdings and all aspects of their appointment,” the announcement said. Prior to this announcement, the most recent post for the channel was on January 2, before the $2.7 million hack.

In addition, Interpath will investigate the data breach in January and try to recover investors' money, the post said.

Cointelegraph reached out to Interpath Limited via email to confirm the authenticity of the post. Company director James Drury responded that the message was posted privately.

In the year The old wallet that previously held the funds is also removed, and all previous signatories are removed from this multi-signature wallet. Also, “Nothing [of the old signers] They will participate in the new wallet,” he said, explaining that the HectorDao team cannot authorize transfers from the treasury.

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The organization has been granted the authority by the court to identify, collect and maintain Hectardao's assets, but does not yet have the authority to distribute them. In order to distribute the funds, Interpath will need to obtain “final approval” from the court, the post said.

In another incident last July, HectorDao lost more than $8 million when some of the bridging tokens on Phantom were withdrawn from Ethereum collateral. This was ultimately caused by the $1.5 billion Multichain exploit, which forced the Multichain Phantom Bridge to shut down on July 14th. That same month, The DAO voted to bypass the Treasury and return the funds to investors. As of publication, most of the funds have still not been distributed.