Verify a decision

{"actor":"system:backfill","investigation_id":"e8bddd4e-2f5b-4829-9385-e7c7db3f5ffe","kind":"publish","page_slug":"paraspace-lending-v1","published_at":"2026-05-28T03:59:59.908Z","sequence_num":1,"snapshot":{"content_type":"investigation","entity_name":"ParaSpace Lending V1","sections":[{"content":"","heading":"","severity":"medium","sources":[{"credibility":3,"name":"https://www.prnewswire.com/news-releases/paraspace-launches-the-first-cross-margin-lending-protocol-for-nft-and-fungible-tokens-301699670.html","type":"other","url":""},{"credibility":3,"name":"https://defillama.com/protocol/paraspace-lending-v1","type":"other","url":""}]},{"content":"","heading":"","severity":"medium","sources":[{"credibility":3,"name":"https://blocksec.com/blog/paraspace-incident-a-race-against-time-to-thwart-the-industrys-most-critical-attack-yet","type":"other","url":""},{"credibility":3,"name":"https://cryptoslate.com/paraspace-hack-in-retrospect-5m-rescued-large-withdrawals-time-locked-hacker-wants-fees-back/","type":"other","url":""},{"credibility":3,"name":"https://www.theblock.co/amp/post/220761/blocksec-prevents-5-million-from-being-stolen-on-paraspace","type":"other","url":""},{"credibility":3,"name":"https://www.certik.com/resources/blog/aping-peril-the-price-manipulation-exploit-with-paraspace","type":"other","url":""}]},{"content":"","heading":"","severity":"medium","sources":[{"credibility":3,"name":"https://beincrypto.com/paraspace-claims-ceo-went-rogue/","type":"other","url":""},{"credibility":3,"name":"https://www.bitdegree.org/crypto/news/paraspace-ceo-disagrees-with-allegations-of-recovered-fund-mismanagement","type":"other","url":""},{"credibility":3,"name":"https://thedefiant.io/news/nfts-and-web3/paraspace-team-alleges-ceo-embezzled-usd1-7m","type":"other","url":""},{"credibility":3,"name":"https://crypto.news/paraspace-nft-protocols-ceo-stays-firm-as-usurper-resigns/","type":"other","url":""},{"credibility":3,"name":"https://beincrypto.com/paraspace-co-founder-resigns/","type":"other","url":""},{"credibility":3,"name":"https://www.gate.com/news/detail/3728952","type":"other","url":""}]},{"content":"","heading":"","severity":"medium","sources":[{"credibility":3,"name":"https://gritdaily.com/how-yubo-ruan-built-parallel-finance/","type":"other","url":""},{"credibility":3,"name":"https://cointelegraph.com/news/paraspace-continue-nft-lending-rebrands-parallel-finance","type":"other","url":""}]},{"content":"","heading":"","severity":"medium","sources":[{"credibility":3,"name":"https://cointelegraph.com/news/paraspace-continue-nft-lending-rebrands-parallel-finance","type":"other","url":""},{"credibility":3,"name":"https://medium.com/@ParallelFi/parallel-finance-and-paraspace-are-merging-to-create-parax-a-web3-super-app-powered-by-account-5a5f8ae2fc5f","type":"other","url":""},{"credibility":3,"name":"https://medium.com/@ParallelFi/migrating-from-paraspace-to-parax-everything-you-need-to-know-c4a4964c5c41","type":"other","url":""},{"credibility":3,"name":"https://defillama.com/protocol/paraspace-lending-v1","type":"other","url":""}]},{"content":"","heading":"","severity":"medium","sources":[{"credibility":3,"name":"https://www.certik.com/resources/blog/aping-peril-the-price-manipulation-exploit-with-paraspace","type":"other","url":""},{"credibility":3,"name":"https://cryptoslate.com/paraspace-hack-in-retrospect-5m-rescued-large-withdrawals-time-locked-hacker-wants-fees-back/","type":"other","url":""}]}],"sources_used":[],"summary":"ParaSpace Lending V1 was an Ethereum-based cross-margin NFT and fungible token lending protocol launched in December 2022. In March 2023, a price manipulation exploit targeting the AutoCompoundApe contract nearly drained $5 million (2,909 ETH) from the protocol; blockchain security firm BlockSec intervened in a white-hat operation to recover the funds. In May 2023, a separate internal governance crisis erupted when over 19 team members accused CEO Yubo Ruan of misappropriating approximately 1,454.5 ETH (~$2.7M) from the recovered funds, allegations Ruan denied. The protocol subsequently rebranded through a merger with Parallel Finance, forming ParaX in August 2023, while the original V1 contracts were wound down and remain at minimal TVL as of 2026.","timeline":[{"date":"2022-12-12","event":"ParaSpace officially launches as the first cross-margin NFT and fungible token lending protocol on Ethereum, backed by Sequoia Capital, Coinbase Ventures, Founders Fund, and Polychain Capital.","source":""},{"date":"2023-03-17","event":"Attacker exploits price manipulation vulnerability in the AutoCompoundApe contract, initiating a flash loan attack targeting 2,909 ETH. BlockSec's Phalcon system detects the attack in real time; BlockSec executes a white-hat version of the exploit and recovers the full 2,909 ETH. Protocol losses from slippage: 50–150 ETH (~$270,000 or less). ParaSpace pauses the protocol.","source":""},{"date":"2023-03-18","event":"ParaSpace confirms all user funds secured. Protocol remains paused pending additional security audits. Large-withdrawal time-locks implemented.","source":""},{"date":"2023-05-10","event":"Internal governance dispute becomes public. Over 19 team members publicly accuse CEO Yubo Ruan of misappropriating approximately 1,454.5 ETH (~$2.7M) of the recovered funds through EOA wallet 0x909. Co-founders Jay Yao and Thomas Schmidt lead the public accusation. Prominent commentators advise users to withdraw funds.","source":""},{"date":"2023-05-12","event":"Yubo Ruan publicly denies allegations, characterizes the 0x909 wallet as an operations and insurance wallet, and claims Yao and Schmidt unlawfully seized control of protocol multisig and social media accounts.","source":""},{"date":"2023-05-19","event":"Resolution announced. Jay Yao and Thomas Schmidt resign from ParaSpace. Both issue public apologies. Ruan remains CEO and gains sole authority over the protocol multisig wallet.","source":""},{"date":"2023-08-01","event":"ParaSpace announces merger with Parallel Finance to form ParaX, a 'Web3 super app.' Combined TVL at announcement exceeds $250 million.","source":""},{"date":"2023-09-04","event":"User migration from ParaSpace to ParaX begins.","source":""},{"date":"2023-12-01","event":"Merged entity rebrands from ParaX to Parallel Finance, refocusing on DeFi expansion including liquid staking and Layer 2 solutions.","source":""},{"date":"2026-05-27","event":"ParaSpace Lending V1 contracts remain deployed on Ethereum, ZKsync Era, Arbitrum, and Polygon with a combined TVL of approximately $115,000, indicating near-total user exodus from the legacy V1 contracts.","source":""}]},"v":1}