Algorand’s Venture Arm, Algo Capital, Loses Millions in Crypto Wallet Security Breach

Algo Capital, the investment division of the US-based blockchain startup Algorand, reportedly lost around $1-2 million in Algorand (ALGO) tokens and Tether (USDT) stablecoins after the company CTO Pablo Yabo’s mobile phone was hacked.

The security breach allowed hackers to access an Algo hot wallet managed by Yabo, according to Coindesk, which cited a sources familiar with the matter. 

The company’s CEO David Garcia reported the total amount of damages in an email. He said that Algo’s management had shared the details regarding the breach with its limited partners.

The report, which cited an anonymous source, noted that Algorand is aware of the security breach suffered by Algo Capital. Garcia said the company would take full responsibility for the damages and intends to reimburse the stolen funds within 20 months. 

Garcia also mentioned:

“We are engaging with certain key organizations and security services to collaborate and address this issue which has become a common industry problem.”

Although the Algorand network was not affected due to the breach, as most of the platform’s funds reside in cold wallets that were not hacked, Yabo has reportedly left his position. This, according to an email sent to the firm’s partners.

Algo Capital raised $200 million in August 2019 for its venture capital fund. The company was planning to make investments in projects that were developing infrastructure for Algorand’s blockchain-based platform. 

Algorand’s open-source public blockchain and crypto payment system is based on a Byzantine Agreement message-passing protocol.

The Algo token is down 3.53% over the past 24 hours, according to CoinMarketCap data. The token’s market capitalization currently stands at $90.3 million, making it the 54th largest cryptocurrency.

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