ParaSpace Civil War Erupts Over Missing Millions

ParaSpace Civil War Erupts Over Missing Millions

Team members at NFT lending protocol ParaSpace have accused project founder Yubo Ruan of withholding corporate funds worth millions of dollars. 

In March, ParaSpace recovered $5 million from a platform hack – but the team now claims Ruan kept the majority of that money for himself. Yubo Ruan has responded by calling the accusations “unverified information.”

Also Read: Azuki and Nakamigos NFTs Double Monthly Sales Despite Bears

Missing millions

A top NFT-Fi lending platform with over ~$140 million TVL, ParaSpace has now descended into a very public civil war over the missing funds recovered from a protocol exploit on March 18.

According to multiple team members including COO Thomas Schmidt and CBO Jay Yao, over half of the hacked funds were never deposited into the ParaSpace multi-sig wallet. ParaSpace alleges that the bulk of the money instead remains in a wallet under the total control of founder Yubo Ruan. Team members further allege that the money is being siphoned away over time.

On May 10, the ParaSpace Twitter account revealed that: “since the hack, over approximately $1,000,000 USD equivalent amount has outflown to various unknown wallets as well as out to CEXs and Circle redemptions.”

ParaSpace went on to add, “there are no longer enough available funds from the initial amount to cover the hole in the protocol treasury.”

Team members have been keen to assure users that the financial hole made by the missing money “will not significantly impact the financial stability of the platform.”

A response from the (former) chief

ParaSpace founder Yubo Ruan refutes the accusations but initially failed to directly contradict their substance. Ruan first called them an “unauthorized tweet.”

“It’s important to know that this account [official ParaSpace account] is currently under the management of Jay, a former marketer, who’s, unfortunately, sharing unverified information,” said Ruan. “For official updates, please wait for the update.”   

In a follow-up tweet Ruan went on to clarify his side of the story.

“Two former consultants, Thomas Schmidt, and Jay Yao, have illegally obtained control of one of the protocol’s multisig and social media accounts. They did so by contacting key contributors, investors, and partners to make misrepresentations that they are founders/shareholders of @ParaSpace_NFT and 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.”

Team members have in turn accused Yubo of delaying tactics and “vague responses.”

In a final assurance to users, the ParaSpace team states, “All user funds and assets are safe and cannot be accessed by Yubo.”

United against Yubo Ruan

The ParaSpace team members that have accused Rubo Yuan are as follows:

Chief Operating Officer, Thomas Schmidt

Chief Business Officer, Jay Yao

Director of Marketing, Jenn Duong

Lead Protocol Research, David Rodriguez

Lead Solidity Developer, Walid Habboul

Product Manager, Jonathan Cheng

Head of BD, Sheel Shah

Head of Community, Dylan Weatherford

Head of Partnerships, Justin Tyler

Head of Europe, Ethan Crawley

Head of APAC, Pan Hu

APAC BD/Community, Luke Hsieh

APAC Community, Maggie Hu

APAC BD, Ming Ren

APAC BD/Community, Carey Fang

BD Operations, Randall Ly

BD Anaylst, Rachel Ybanez

BD Analyst, April Adlawan

BD Analyst, Maddy Campomanes

Despite the long list of accusers, Ruan says, “The majority of our team is already aware of the situation and is in active communication with me to battle against the issue.” Another tweet read “Protect @parasapce [sic]. Protect users. Stand with @yuboruan against malicious takeovers.”

Soon after the news broke, several of the aforementioned team members hopped on a Twitter Spaces live stream to answer questions from the community and assert their commitment to transparency and protecting user funds.

Image credits: Shutterstock, CC images, Midjourney, Unsplash.