Okay, how do I start… this whole thing is just crazy! Earlier this week, news dropped on Forbes that my former TenX Co-Founder Toby Hoenisch could actually be the DAO hacker.
To put this into perspective: the 3.6 million ETH stolen from the DAO back then would be worth $11 billion dollars today.
Almost worse for many investors, the hack was the reason for Ethereum to split into ETH and ETC – an event that is still used to argue against Ethereum even up to this day and has definitely caused severe reputational damage to the blockchain. Who knows where Ethereum would be today, had this hack not happened.
And now it turns out that my ex co-founder is allegedly responsible for this – based on overwhelming evidence uncovered by ex-Forbes journalist Laura Shin and Chainalysis.
The first time I heard this, I almost couldn’t believe it. But on hindsight, many things make sense now…
Laura Shin, who traced the DAO hack back to Toby Hoenisch while researching for her new book “The Cryptopians”, contacted me on February 16th to ask for a chat about what happened at TenX and how I got booted out of the company. I had already shared everything prior in a public video and blog post and thought there was no harm reiterating.
We agreed to a call on February 17th 22:30 local Singapore Time. I had expected a 45-minute conversation. Two hours later, she had asked me about every single detail about how I had met Toby Hoenisch, how TenX started, how I was forced out, and what happened afterwards.
Up until that point, I had absolutely no clue about all the evidence she had gathered, or why she was asking all these questions. I was ready to go to bed, when she asked me, if she could share something with me that I would commit not to share with anyone. I agreed and expected anything… but not what she said!
She told me she had airtight proof that my former partner Toby Hoenisch was the DAO hacker. I just sat there. Half a minute – completely incredulous. Was he technically capable? Yes. Could I imagine it? Heck no!
She didn’t reveal a single bit of information upfront. I had no clue about the headline, the content, or the evidence. But she told me there would be an article on February 22nd, that would reveal everything, and if I had any further information to share, I should do so.
By that time, it was 1:30am here in Singapore… the tiredness I had before was gone. The feeling was that of full disbelief mixed with curiosity if Laura could be right. But where do I start? I didn’t have access to my TenX business emails or Slack messages anymore, as Toby had pushed me out in the beginning of 2019, and I had lost access to most of the communication and pictures.
However, I still had our early personal conversations from when we met in 2014, then when we were together in Singapore in 2015 – and… wait for it… when the DAO hack happened.
I couldn’t even remember these messages from 2016. I can’t even remember the discussions, but here they are. So, a quick timeline:
Toby and I met at an entrepreneurial meetup in Bangkok in 2014. He popped up on Facebook as a fellow Austrian. That’s how we connected, and he was the one explaining blockchain to me.
We stayed in touch, and he kept me posted on what was happening in the crypto space. In May 2015 we chatted at a meeting for a hackathon in Singapore.
I struggled with the idea of making bitcoin spendable at that time, but Toby was committed to getting OneBit (the company that became TenX) off the ground. We stayed in touch, brainstormed various ideas, and he kept me in the loop about crypto.
One of the first emails I have from him other than “Let’s call at X”, is this one, where we chat about going to a Tony Robbins business event in August 2016 and taking OneBit seriously. We talked about business masterminds costing 75k, but him not having the money to afford either.
On May 12th, he pitched an Ethereum trade out of the blue… we had never discussed such things and to be honest, even though I can’t remember whether I listened to him or not, but after having lost all my money in 2008, I had become very sceptical with investing.
We had no written communication in between, but on May 29th, he dropped me an email congratulating me on my engagement (on May 28th) and updatedme on this trade:
Looking at this email now with the information Laura Shin shared in her research, this raises quite a few eyebrows, but I cannot even remember giving this email any thought. Re-reading it now, though, makes my stomach churn.
No further written communication until June 9th 2016. “Waiting for 50k to come in…” I knew Toby hadn’t been doing well with his crypto investments despite him having been in crypto since 2010, so I knew money was tight.
The DAO Hack happened on June 17th, 2016.
June 20th 2016: “Flights booked”. Toby seemed to have gotten the money.
Coincidence? Maybe. Probably. What do I know? I definitely didn’t think anything of it until a few days ago, when Laura contacted me. I shared all this with her via encrypted email. I didn’t know what evidence she had, but this was an interesting coincidence.
Toby, Paul and I met in August 2016 in Las Vegas for a business event and after that, most of TenX’s history became quite public: I had built up a crypto YouTube channel in Germany talking about crypto, ICOs, and more.
Toby seemed to be quite good with tech skills, and Paul with design. The company rebranded from OneBit to TenX (“Stop going one bit at a time, and let’s TenX everything”). We joined the PayPal incubator in Singapore and also got the Mastercard cards live.
Also, the idea of doing an ICO in 2017 came up. First, we did a 1 mil USD Seed round – 800k USD came from my personal connections and 200k came from Fenbushi Capital. Here, people wrongly criticized us for having listed out the Fenbushi investors including Bo Shen, Vitalik, and others, and said we had incorrectly claimed they were affiliated with us – which they were. But, I digress. The original plan was to do a 20mil USD ICO, but the ETH price went so crazy, that the 200k ETH turned into 80mil USD on June 23rd 2017.
From 2016 onwards, I had become a public face of the company – obviously, everyone was associating me with its success (and later its downfall). Toby and Paul stayed in the back. Up until that point, I had zero weird feelings, but November 2017, a strange decision was made:
COMIT, which was supposed to connect Bitcoin and Ethereum, should be handled by a foundation. This was not weird. What was weird, was that Toby wanted to set this up in Australia – led by his brother.
Why Australia? Why his brother? To be honest: I didn’t think too much of it, but looking back with the knowledge I have today, this could have given him an easy way to possibly siphon money from the TenX treasury into a foundation led by a family member.
However, I didn’t think too much of it and was more focused on driving the business success in 2017 – which, considering all the insane crypto hype later that year, came in like crazy. In December 2017, all this craziness became too much for me and I sold a sizable amount of Bitcoin. I had bought them in 2015 at approximately 500 USD per coin, and they were now 40x of that – life changing money for me!
Not only did Toby criticize me for that, but the entire crypto community. How could I “betray them and not believe in the long term success?” I did believe in the long term success, but to me the crypto craziness that Laura describes well scared me.
This laid a lot of the foundation for Toby’s and my struggles with each other in 2018. He wanted more money and was constantly focused on not having enough. He regarded the ICO money as “his money”, while I saw this as us owing something to the community.
These struggles worsened with crypto prices going down, the community being unhappy with us, and Toby “wanting to put the treasury to work”, with me playing gatekeeper on the company’s board.
After having lost our Wavecrest card issuer in the beginning of 2018 and Wirecard lying to us with fake timelines, the community was absolutely right to be pissed with us – especially me, as I was the public face of the company.
At the end of 2018 we had finally achieved it: Cards were live again, the banking licence in Liechtenstein was good to go, and a tough 2018 seemed to turn into an exciting 2019. Which never happened.
When I came back from the Christmas holidays, Toby had prepared everything to get me out of the company. Back then I thought this was out of jealousy, but with the info I got over the past days, I actually think this was for another reason: access to money.
Once I (and much of other senior management) was out, he had access to the treasury with over 100mil USD, and he was able to focus on a Monero – Bitcoin swap on COMIT. If he is the DAO hacker, both are things that would help him greatly to get access to the money.
And after that, my information is as good as yours. Toby started to close everything down, and in July 2020 he stepped away to become… wait for it… CFO (with zero financial background!)
1 year later on April 1st (nice coincidence) 2021, he closes the company and transfers all the funds out of the original crypto accounts.
The background info I have, combined with Laura’s info, explains a lot in how opportunistic Toby approached all these situations. It did leave a sour taste in my mouth, as people kept pointing at me, simply because of having been the public face of the company.
There is a silver lining, though, and it is NOT this story that Laura broke. It is that all this drove a deep desire in me, to prove to the community that this was not me who took off with their money, but actually Toby.
It gave me the energy to start Cake DeFi with U-Zyn, who I had met as one of the lead blockchain engineers at TenX. It built a deep friend- and partnership that allowed us to build a billion-dollar company in just under 3 years.
As crazy as all this sounds, and as much as it is still unbelievable and as much as I had suffered, I am thankful for all of it.
Thankful for Cake DeFi with all its great team members, thankful for the community, thankful for my family and many more things that wouldn’t be where they are today, had this not happened to me. So thank you.