Protocol developers call for CEO and CTO Yubo Ruan’s resignation amid accusations, while Ruan retaliates with allegations of an “illegal takeover” by the development team.
On May 10, nonfungible tokens (NFT) financialization protocol ParaSpace published several alleged irregularities tying its CEO, founder, and CTO Yubo Ruan to the mismanagement of funds equaling 2,909 Ether recovered through a white-hat interception that occurred on March 18. Ruan denied any wrongdoing, writing: “manufacturing claims with the intent to take over and force me to step down as CEO. This is highly problematic and the legal team has taken action.”
In March, ParaSpace encountered a price-slippage exploit that was promptly resolved, with blockchain security firm BlockSec intercepting the hack. The firm successfully prevented malicious actors from obtaining 2,909 ETH from the protocol and subsequently returned the assets to ParaSpace staff.
According to Paraspace, Ruan had “exclusive control and management” of a portion of protocol funds returned by BlockSec. Developers subsequently allege that a portion of the 2,909 ETH believed to be in control by Ruan had “not been fully returned to protocol, with initially over 50% unreturned, leaving a hole in the protocol treasury.” The development team also alleges 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.”
ParaSpace, through its official Twitter account, calls for Ruan to “step down from his roles as CEO and CTO.”
On the other hand, Ruan alleges that two former ParaSpace consultants, Thomas Schmidt and Jay Yao, who are currently stated 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 said that upon receipt of rescued funds from BlockSec, a structured redeposit procedure was agreed to and scheduled in phases “by myself, Thomas, Jay, and other key engineering stakeholders.” The CEO wrote:
“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.”