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On May 10th, ParaSpace’s Non-Fungible Token Financialization (NFT) protocol released several alleged violations linking its CEO, Founder and CTO Yubo Ruan to the mismanagement of 2,909 Ether (ETH) funds from an interception that occurred on March 18th. Ruan denied any wrongdoing, writing, “Creating claims with the intent to seize power and force me to step down as CEO. This is very problematic and the legal team has taken action.”
Dear ParaSpace Community,
TL;DR: There have been no malicious acts from the team. All funds are safe from Yubo, the protocol is under the full control of the team, and we have the financial means to ensure the stability of the platform.
Today, we are sharing information brought… pic.twitter.com/58M3U1uLwv
— ParaSpace (@ParaSpace_NFT) May 10, 2023
Around March 18, ParaSpace experienced a price slippage issue that was quickly fixed. Around the same time, blockchain security company BlockSec intercepted the hack. He moved 2909 ETH from the protocol before the attackers could get the funds and subsequently returned the assets to ParaSpace employees.
According to Paraspace, Ruan had “exclusive control and management” of some of the protocol facilities returned by BlockSec. The developers subsequently claim that some of the 2,909 ETH believed to be controlled by Rouen “was not fully returned to the protocol, with more than 50% not initially returned, leaving a hole in the protocol’s coffers.” The development team also claims that these assets “went to various unknown wallets as well as CEX and Circle redemption” totaling $1 million.
“As a result, the team came together, multi-signed the protocol, and removed Yubo, as well as any addresses not directly controlled by the team.”
ParaSpace, via its official Twitter account, is urging Ruan to “step down as CEO and CTO”.
On the other hand, Ruan alleges that two former ParaSpace consultants, Thomas Schmidt and Jay Yao, who are currently named the protocol’s COO and CBO respectively, “illegally gained control of one of the protocol’s multi-signature and social media accounts” by injecting misleading. Ruan said that after receiving the rescued funds from BlockSec, a structured re-deposit procedure “by me, Thomas, Jay and other key engineers” was agreed and planned in stages. The CEO wrote:
“To date, according to the schedule, the entire debt of the hacker has been transferred back to the hacker account. The remaining amount has already been paid in full in accordance with the schedule. The mischaracterization on their part is absurd and I have nothing to hide.”
Cointelegraph has not independently verified the claims made by either side. ParaSpace stated that “our top priority is to resolve this situation quickly and effectively.” Meanwhile, Ruan wrote: “Please be mindful of the legal implications of these illegal takeovers.”
Contributors at @ParaSpace_NFT ,
I write to make you aware of a pressing matter concerning our company. Two former consultants, Thomas Schmidt, and Jay Yao, have illegally obtained control of one of the protocol’s multisig and social media accounts. They did so by contacting key…
— Yubo Ruan (@yuboruan) May 10, 2023