SushiSwap Head Chef Hit by Controversy in First Week

The DeFi platform’s top executive faces scrutiny over his past crypto ventures as Sushi adds another chapter to its history of leadership drama

article-image

Source: Shutterstock

share

key takeaways

  • An investor in Jared Grey’s earlier DeFi project accused the head chef of mishandling hacks, though admitted to Blockworks his case was “speculative”
  • Sushi’s native token dropped 10% following the allegations

SushiSwap’s newly-elected top executive — or “head chef” — has been accused of mishandling wallet exploits at his prior employer. 

The allegations appear flimsy, but they still present a headache for the DeFi platform accustomed to leadership drama. And legal action is brewing. 

Jared Grey was elected head chef of SushiSwap on Oct. 3 via an on-chain election dominated by venture capital firms, and the accusations came as Grey was still an unfamiliar figure to many in the protocol. 

The purported misconduct centers around Grey’s alleged negligence during a string of 2019 insider hacks at DeFi protocol ALQO, as then-CEO. Twitter user @YannickCrypto, who worked with Grey to stem the ALQO hacks in 2019, outlined the accusations on Twitter Monday

SushiSwap’s native SUSHI token, which had already fallen 90% from its 2021 high, dropped another 10% on the news. The token had trended up following the election.

ALQO (since rebranded as EONS) allowed users to store cryptoassets using its wallet software, Liberio. In February 2019, Liberio users began complaining of suddenly-missing funds. At the time, Yannick released on-chain data suggesting one of ALQO’s developer wallets had been involved. 

Months later, Grey and ALQO concluded the account exploits were coming from ALQO’s chief technology officer Kevin Collmer. Collmer was fired soon after.

Yannick told Blockworks via Discord that Grey “knew about [the hacks] and did nothing” in the months between the withdrawals first being reported and Collmer’s firing “to milk the last dollars out of ALQO.” Pressed to provide evidence for his claims, the on-chain sleuth conceded his case against Grey was “speculative.”

One early ALQO investor told Blockworks that Yannick soured on ALQO following the hacks.

“You could almost say he was obsessed with [destroying ALQO],” the investor wrote.

In November 2019, ALQO published a blog post concluding “Kevin Collmer’s actions contributed directly to the loss of user funds on Liberio.” Collmer maintains his innocence, telling Blockworks that German law enforcement searched his belongings but found no evidence of his involvement in the series of hacks.

Grey insisted Collmer was behind the exploits, adding the ALQO co-founder was terminated when he made off with investor funds as ALQO planned to expand.

“He stole the money, ghosted us for [two] months, and then after we demanded the money back via a demand letter, he never returned it, and we fired him,” Grey said in a Twitter DM.

Grey is now suing, or about to sue, Collmer in Germany, according to sources familiar with the matter. Grey declined to comment on the lawsuit. 

Several hacked ALQO users told Blockworks that Grey was transparent about the hacks and refunded their coins — albeit at a lower price — following Collmer’s departure. 

Following the allegations, Grey fessed up to business failures on Twitter but denied any specific wrongdoing with ALQO. On Wednesday, Grey penned a blog rebutting each of Yannick’s allegations.

In his first week as head chef, Grey returned his earmarked severance package to the Sushi DAO treasury and teased SushiSwap stable pools.

But for the top executive of SushiSwap, controversy seems to come with the territory.


Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the On the Margin newsletter.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.

Tags

Upcoming Events

Salt Lake City, UT

MON - TUES, OCT. 7 - 8, 2024

Blockworks and Bankless in collaboration with buidlbox are excited to announce the second installment of the Permissionless Hackathon – taking place October 7-8 in Salt Lake City, Utah. We’ve partnered with buidlbox to bring together the brightest minds in crypto for […]

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Pack your bags, anon — we’re heading west! Join us in the beautiful Salt Lake City for the third installment of Permissionless. Come for the alpha, stay for the fresh air. Permissionless III promises unforgettable panels, killer networking opportunities, and mountains […]

recent research

Research Report Templates.png

Research

ZKPs enable efficient offchain transaction processing and validation, resulting in increased throughput and reduced fees. Solana's ZK Compression leverages ZKPs to minimize onchain storage costs, while Sui's zkLogin streamlines user onboarding by replacing complex key management with familiar OAuth credentials.

article-image

Mt. Gox creditors are finally getting their bitcoin back — even if it’s only one click away from being sold

article-image

Plus, is Polymarket this cycle’s breakthrough mainstream app?

article-image

The crypto asset manager lowered its planned fee from 0.25% to 0.15%, undercutting its competitors

article-image

Plus, a look at planned ETH ETF fees and how they differ from their BTC counterparts

article-image

North Korea suspected in breach of Indian exchange’s multisig wallet

article-image

Plus, Sanctum’s CLOUD token has officially launched — but not without problems