Algo Capital Loses Crypto Funds After CTO's Phone Is Hacked

Algo Capital, an investment firm focused on the Algorand blockchain, lost a few million dollars in USDT and ALGO tokens after its chief technology officer's phone was breached, CoinDesk has learned.

According to a source familiar with the matter, Algo Capital reported to its limited partners Friday that Pablo Yabo, its CTO, had his mobile compromised which allowed attackers to seize control of an Algo hot wallet administered by Yabo.

"We communicated to all the Algo Capital VC Fund Limited Partner's and updated them about the incident."

The Algorand team is aware of the breach suffered by the investment firm, the source said.

Algo Capital has raised $200 million for its Algo VC Fund, with the cash intended to support projects in the Algorand economy.

"Our investment approach specifically targets companies that are creating the next great blockchain applications and infrastructure solutions, and as a result, helping to speed blockchain adoption and bring millions of new users into the Algorand network."

The investment firm is a separate entity from the Algorand Foundation and Algorand LLC, which oversee the blockchain's actual development.

The majority of the firm's funds were held in cold wallets that were not compromised.

The Algorand blockchain itself was first envisioned by MIT professor Silvio Micali in 2017 as a possible solution to the scaling issues other blockchains face.

Under its consensus mechanism, the network randomly selects the machines which add the next blocks to the blockchain, as a variant of the proof-of-stake mechanism.