Nirvana Finance founder recalls ‘worst day’ of his life.

Until now, Alex Hoffman, head of ecosystem at Superposition, has kept secret that he is the anonymous founder of Nirvana Finance, a decentralized finance (DeFi) yield protocol that suffered a $3.5 million flash loan attack two years ago.

Now he’s ready to put his name to the anonymous founder title and tell the story of the “worst day” of his life, which began when he woke up one morning to discover that all of his Nirvana Finance money was gone.

In an exclusive interview with Cointelegraph, Hoffman described the morning of July 28, 2022: “Literally the week we were supposed to start the audit, we woke up and found out we had been hacked.”

“When something like this happens, you learn who your friends are and who aren’t.”

The search for the Nirvana Finance hackers lasted 17 months.

It wasn’t until December 2023, after a lengthy investigation involving blockchain investigators and multiple enforcement agencies, that software engineer Shakeeb Ahmed was arrested after admitting to hacking Nirvana Finance. On April 12, he was sentenced to three years in prison.

Hoffman explained that Ahmed’s attack took so long because it was so “sophisticated.” Despite the best efforts of blockchain investigators, they continue to hit “dead ends.”

Random telegram message from the Department of Homeland Security

But a serendipitous Telegram message marked a turning point in the investigation when US Department of Homeland Security officials, who believed they had a solid lead about the attack, linked it to the same hackers behind another recent attack.

“He wanted to make sure the team would work together to build the case,” Hoffman explained.

Before Hoffman knew it, he had spent months going back and forth with officers and other officials from the Department of Homeland Security, prosecutors, IRS investigators and others.

Eventually, after authorities reviewed the transactions and matched them to other exploits, they asked Hoffman to explain exactly how the protocol’s infrastructure worked. From there, they were able to trace Ahmed’s attack.

Although Nirvana Finance was not open source, Hoffman explained that Ahmed discovered “flaws in the code by pinging the system and figuring things out.”

Hoffman accepted death threats for exploitation.

It was an incredibly stressful 17 months for Hoffman, he said.

Not only did he lose most of the money tied up in what he believed to be the perfect protocol, but he also worried that, as an anonymous founder, victims would think he had “solidified” the project.

He wanted to be vitriolic right then and there, so he could explain that the founders behind the project were not the cause of the attack.

But threats were already coming in quickly through Nirvana Finance’s Twitter account, and they feared it was only a matter of time before someone figured out who they were.

“I have received dozens of death threats and threats to harm my wife, mother and children. It was non-stop,” Hoffman said.

Solana CEO urges audit firms to make Nirvana Finance a priority

Looking back on the protocol’s rise and fall, Hoffman said he never expected Nirvana Finance to take off so quickly.

“We released this piece not thinking it would attract that much attention. “We were trying to do a soft launch,” he said, before attracting the attention of several Chinese media outlets, which led to a significant spike in total value locked (TVL).

“We achieved about 25 million TVL in the first week,” he said.

Related: Japanese exchange DMM loses $305 million in Bitcoin due to private key hacking

It spread so quickly that even Solana personally urged CEO Anatoly Yakovenko to conduct a security audit of the protocol.

Meanwhile, Hoffman was already on the waiting list. Waiting lists are long among the top audit firms.

“Anatoly personally asked one of the audit firms if they could put us at the top of their list,” Hoffman added.

Today, Nirvana Finance remains insolvent but has plans “still in the works.” According to the Nirvana Finance website, investors should be extremely cautious when trading the native token, Nirvana (NIRV).

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