The brother of WikiLeaks founder Julian Assange hit back at blockchain security firms SlowMist and RescuETH on June 17, telling Cointelegraph that the firms’ April report that AssangeDAO may be “soft-rugging” is “just false.” The two security firms reported that the decentralized autonomous organization had exhibited “suspicious” transactions and that community members feared it was carrying out a “soft rug,” or gradual exit scam.
Assange’s brother, Gabriel Shipton, stated via Telegram that “SlowMist’s article is just false — they have confused AssangeDAO for the Wau Holland Foundation, to start with.” According to Shipton, AssangeDAO no longer holds the 16,593 Ether (ETH) (approximately $53 million) that it raised in 2022, as all of it was spent on a “Clock” non-fungible token (NFT) produced by the artist Pak as a part of the “Censored” collection.
Pak donated the proceeds of the sale to the German charity organization Wau Holland Foundation, and the funds are no longer under the control of AssangeDAO. “The proceeds of the sale were all donated to the Wau Holland Foundation Moral Courage Project: Julian Assange — with the nominated purpose to support the freedom and defense of Julian Assange,” Shipton stated.
In addition, Shipton claimed that the German charity is using the funds for their intended purpose and complying with all local laws:
“The ETH has been with the Wau Holland Foundation, who draw down on it to pay Julian’s many legal bills and campaigning costs. […]The Wau Holland Foundation is governed by German charity law and has a long-standing relationship supporting Julian and WikiLeaks.”
Assange is currently incarcerated in a London jail, having been accused by the United States of espionage for his alleged role in publishing classified documents on WikiLeaks. He is fighting against extradition and has a hearing scheduled for July 9. Supporters, including the organizers of AssangeDAO, argue that his actions were protected free speech and did not constitute crimes.
Blockchain data confirms that AssangeDAO purchased the Clock NFT on Feb. 9, 2022 for 16,593 ETH. The proceeds of the sale were sent to the Censored: Clock deployer address that begins with 0x5DA and are no longer held by the AssangeDAO multisig.
Cointelegraph contacted SlowMist for comment but did not receive a response by the time of publication. SlowMist is a blockchain security firm that offers Anti-Money Laundering (AML) compliance and wallet security software. It is known for assisting exchanges and protocols with tracking down stolen and laundered funds.
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The inception of AssangeDAO
AssangeDAO was created in early 2022 to pool investors’ funds to purchase the Clock NFT. It was modeled after the earlier ConstitutionDAO, which had attempted to raise funds to purchase an original copy of the U.S. Constitution.
AssangeDAO raised over $53 million in February 2022, making it the most well-funded DAO in history.
When AssangeDAO was formed, a collaboration between Assange and Pak was also announced. The artist planned to release a collection of NFTs called “Censored.” One of the NFTs, “Clock,” displayed a counter that tracked how many days Assange had spent in jail for his work with WikiLeaks.
According to the project‘s website, the Censored line of NFTs was intended to be sold to raise funds for Assange’s legal defense.
AssangeDAO is a purportedly separate entity from the Censored project, as it was formed to buy the art piece rather than create it. The DAO issued a token called JUSTICE, which it sold for ETH. According to the DAO’s statements at the time, the funds raised from this effort would be used to bid on the NFT. The DAO hoped to win the bid and acquire Clock. But if it failed, it hoped to at least increase the floor price of the digital art piece, allowing Assange’s family to raise more funds than it otherwise would have.
SlowMist report claims “suspicious” transactions
On April 2, SlowMist and RescuETH released a report cautioning investors against interacting with AssangeDAO. “The true intentions behind AssangeDAO remain unknown,” the report stated, “and we await an official explanation or further disclosure of information from the organization itself.”
In the meantime, “investors should also be aware of the risks involved and conduct thorough research and evaluation before investing in any project, especially those involving Decentralized Autonomous Organizations.”
The two firms claimed that a suspicious transfer of 100 ETH (worth approximately $388,000 at the time) occurred on March 10, 2024. This transfer came from the “Censored: Clock Multisig,” which has an address beginning with 0x5DA. This address “is linked to the decentralized autonomous organization AssangeDAO,” the report stated, “prompting some community members to express concerns over a potential ‘Soft Rug Pull.’”
The report also claimed that this address is “the multi-signature address of the German Wau Holland Foundation” and that blockchain data “shows that the funds on this address come from funds raised by AssangeDAO.”
Using its MistTrack AML platform, SlowMist reportedly tracked all the transfers from this address. It found that on April 8, 2022, this account sent 580.745 ETH to a smart contract address that subsequently sent it to numerous other wallet accounts. It sent another 34.99 ETH to other addresses on May 9, 2022 and 124 ETH (approximately $250,000 at the time) to a Coinbase deposit address on May 11, 2022.
After sending funds to these various addresses, it pooled them together into just two accounts, one beginning with 0x323 and another beginning with 0x2f9. The 0x323 address was created in October 2020 and frequently sent ETH to centralized exchanges.
The report concluded:
”In the case of AssangeDAO, although its initial goals were noble, recent significant fund transfers have raised many questions, particularly regarding the ultimate destination of the funds.”
AssangeDAO blockchain data
Blockchain data shows that the Censored: Clock deployer address beginning with 0x5DA is not the same account as the AssangeDAO multisig wallet. The Ethereum username AssangeDAO.eth resolves to an address ending in eA00, which is a completely different account from the one that made the allegedly suspicious transfers.
In addition, it shows that this account purchased the Clock NFT, spending approximately $51 million in the process. Several hours after the purchase, Pak released the digital art piece to AssangeDAO, and it remains in the possession of AssangeDAO today. The proceeds from the sale went to the Censored: Clock project team account and are no longer held in the AssangeDAO multisig wallet.
Blockchain data cannot prove that two organizations are completely separate — it can only show that transactions were carried out by two separate wallet addresses.
Shipton claimed that the Censored: Clock deployer account is controlled by the Wau Holland Foundation, not AssangeDAO.
Cointelegraph contacted the Wau Holland Foundation for comment but did not receive a response by the time of publication. According to its website, the foundation is a nonprofit organization focused on promoting the ideas of computer security activist Wau Holland. It also helps raise funds for Assange, as well as for other whistleblowers such as Chelsea Manning, Jeremy Hammond and Edward Snowden.
Some DAO members still unhappy
Despite Shipton’s reassurance, some AssangeDAO members are still unhappy with the team’s behavior.
Cointelegraph spoke with one JUSTICE tokenholder who claimed that the DAO does not have a proper token-based voting system. “The entire $55 million was extracted from the DAO without the approval of the crypto community,” the tokenholder, who spoke on the condition that they remain anonymous, stated. They claimed this violated “the principles of a decentralized autonomous organization, where community consensus is crucial.”
According to the DAO member, some participants wanted to keep a portion of the funds for use in other charity projects, but they were overruled by signers of the DAO’s multisignature wallet, who signed a transaction to spend all of the funds on the NFT. In defense of their decision, the DAO’s multisigners allegedly stated that there was no legal responsibility for a formal vote, as the purpose of the DAO had been clearly stated on the organizer’s website.
DAOs were invented for the purpose of allowing investors to coordinate actions across the internet, even if they were located a great distance from each other and in different jurisdictions. However, they have sometimes also been a venue for fierce disagreements between DAO members.
In January, HectorDAO members accused the development team of engaging in an “inside job” hack after it lost $2.7 million under suspicious circumstances. The DAO was later taken over by an insolvency firm through a court order. In April, some MangoDAO members accused insiders of carrying out the online equivalent of a corporate raid.
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