Resolv co-founder Ivan Kozlov denies insider involvement in the exploit

Ivan Kozlov, co-founder and CEO of Resolv Labs, has shared an update on the Resolv exploit that saw an attacker mint 80 million USR tokens after taking advantage of a compromised private key. 

The CEO addressed rumors of insider involvement in the exploit and also spoke on what they have been up to in terms of redemption, the next phase of the recovery process, while coming short of providing timelines. 

What did Resolv’s founder say to users?

Addressing rumors of insider involvement, Kozlov said, “At this stage, we have not found any evidence suggesting that this was an insider-related incident.” 

This rumor likely emanated as a result of the nature of the attack, a compromised private key controlling a privileged minting role, held by a single account with no multisig protection and no on-chain mint cap to constrain what it could authorize. 

However, throughout the video, which lasted over four minutes, Kozlov maintained a measured tone, which he acknowledged was partly due to legal constraints. 

The founder said that Resolv has engaged the services of experienced legal counsel, Paul Hastings, and Carey Olson to advise on the incident.

Kozlov said, “This legal aspect affects all of the communications that we do,” adding, “We have to keep these communications rather limited, strict, and specific to not make statements that we can’t back up by our actions later,” he said. 

Cybersecurity firm Mandiant, a subsidiary of Google known for its work on state-sponsored cyberattacks, partnered with Zero Shadow, an on-chain analytics and threat intelligence firm, to reconstruct the attack, map exposures, and pursue accountability.

Kozlov said that they started redemptions for pre-exploit USR holders, stating that it was the “fastest, most effective way to reduce the potential downstream effects and stabilize the broader markets.”

He said they had to start with whitelisted holders in order to move quickly, adding that it is near completion, with approximately 98% of whitelisted positions already redeemed. 

For non-whitelisted holders, the founder said that a technical solution is being finalized; however, he did not provide a date or timeline for when that would happen.

Why remains exposed in the absence of a recovery timeline?

Throughout the address, Kozlov failed to speak on the Resolv Liquidity Pool (RLP) and what Resolv plans to do for the holders of its token.

RLP token was designed to absorb losses before they reached USR holders. In practice, that means RLP holders have already borne the first layer of losses.

So far, RLP redemptions are blocked, and holders who have been wondering what their fate is have raised the issue in the comment section. 

Kozlov replied to one of those comments, stating that the team is “still working on the action plan” and will share updates when available.

According to Kozlov, Resolv invested heavily in security prior to the incident, commissioning independent audits including operational security (OPSEC) reviews, running a bug bounty program, and deploying real-time monitoring, and Kozlov conceded that none of it proved sufficient.

On what to expect for the next phase of recovery, Kozloz was not very optimistic in his submission, saying, “The truth is that some of the hardest parts of the recovery are still ahead of us. This is a complicated situation to untangle. I can only assure you that we’re working relentlessly to push this forward and provide timely updates when we have information that we are able to share.”

The absence of a specific date means all affected parties will be actively waiting upon the platform’s next move and information shared, as the founder did not also provide a timeline for when the next set of information will be rolled out. 

As of the time of writing, USR was trading around $0.149, which is a decline of over 85% pre-exploit. The market capitalization has also been on a free fall, standing at around $26.3 million.

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