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21/06/24
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HectorDAO Has Filed for Chapter 15 Bankruptcy
Four days ago, a decentralized autonomous organization called HectorDAO filed for Chapter 15 bankruptcy in the U.S. after experiencing market collapses and hacks. Interpath Advisory’s filing shows that the current financial situation of HectorDAO is based on three issues, including the Terra network’s collapse two years ago, the Multichain protocol’s collapse, and a hack which affected the Hector treasury.
According to the filing, Interpath Advisory is still carrying out investigations to know whether the hack incident which led to loss of funds valued at $2.7 million was an inside job executed by the DAO treasury’s former managers.
HectorDAO’s began two years ago when the Terra ecosystem collapsed, inflicting losses valued at $16 million on its treasury assets. The challenges did not hinder HectorDAO’s members from continuing their usual operations for more than a year. They stopped operating on July 17, 2023, after the 83% of community members voted to liquidate the DAO as per the HIP-42 vote on July 15, 2023.
The community members had two choices, including the migration of the decentralized organization to another blockchain and rebranding the project, as well as liquidating all assets and shuttering the organization. After they voted for liquidation, a committee was formed to oversee the process and distribute the assets.
Unfortunately, while they were ready to distribute assets among investors, bad actors struck through an exploit which led to the loss of $2.7 million. According to the members, they could not establish contact with the liquidation committee after the incident.
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