Investor Concerns Following Dough Finance Security Breach
Investors using Dough Finance, a trading platform co-founded by Chase Herro of World Liberty Financial, are growing increasingly anxious as they await compensation after a significant security breach resulted in the loss of millions of dollars. The company faced a severe setback when hackers exploited vulnerabilities in its software on July 12, leading to the theft of $2.5 million from user accounts, including a substantial investment from client Jonathan Lopez.
Jonathan Lopez’s Investment Experience
Lopez had invested $1 million into Dough Finance in May 2024, following guidance from Herro himself on how to navigate the platform. He incurred a fee of 5% for his investment and used a strategy known as “looping,” where he bought an asset and used it as collateral to purchase more of the same cryptocurrency, aiming to expand his holdings. However, this strategy was upended when the hacking incident occurred just two months later.
Company’s Response and Assurance
In response to the crisis, Zachary Folkman, a business partner of Herro’s, asserted the company’s commitment to ensuring that all affected clients would receive restitution. “Dough Finance is dedicated to upholding top-notch standards of security and transparency,” the organization stated in a July release, marking the incident as a regrettable oversight.
The statement promised that the company would take lessons from this experience to bolster its security measures. Despite these assurances, reports indicate that by August 18, both Folkman and Herro had become unresponsive in their communications via the company’s Telegram channel.
Plans for Compensation and Legal Action
In a further development, Dough Finance revealed plans to distribute proprietary tokens to clients equivalent to the funds lost, which could later be exchanged for Ethereum (ETH) in August 2024. This solution, however, has left some clients dissatisfied.
Lopez has decided to take legal action, with a lawsuit against Herro slated to go to trial in April 2026, raising concerns about the future of investor trust in the platform and the broader implications for the cryptocurrency market.
