Rogue Founder Commits Crypto-Treason — Embezzles Oyster Pearl
Bruno Block’s paranoid vendetta against his own project — an inside story
We have grown accustomed to the unusual in cryptocurrencies.
But even in crypto it’s not every day that we hear a story like this.
This is the story of a gifted man, who used his talents to abuse his position of power and the trust of others. An unstable man with illusions of grandeur, exaggerated self-importance and contempt for mankind. A charismatic man that manipulated thousands of people to share his vision, only to then throw them all under the bus. And he almost got away with it.
I am one of the founders of 8-Bit.io, the company behind KuCoin’s marketing and research. At the time of listing Oyster Pearl, we were also supporting KuCoin’s listing deals. The people in our team are some of the few in the world to have ever come in direct contact with the elusive character that is Bruno Block.
This is the inside story.
It’s October 30, Tuesday morning at 2 am.
KuCoin receives a request from Bill Cordes, the CEO of Oyster Pearl, to shut down all trading for PRL on the platform. We respond swiftly, despite how early it is. Within an hour, we are mobilised and ready for damage control. This is not the first time we have had to react fast to a situation like this.
By the time Bill Cordes noticed suspicious activity, the culprit had already liquidated millions of PRL and withdrawn 300,000 USD worth of proceeds. Turns out this person not only stole PRL, but manipulated its total supply to create millions more with the aim of laundering them through KuCoin.
Bill was quick to join the dots — Oyster Pearl’s anonymous founder, worshipped by Oyster’s community as a visionary leader and known only under the pseudonym Bruno Block, was the only person that wielded the authority to exploit the smart contract in this way.
Why did Bruno defraud his own company?
Hindsight has 20–20 vision.
Going over the community communication channels and Reddit discussions, the signs were there. The most telling being that the founder was completely anonymous and no one knew his real identity, not even the CEO and CFO. A recipe for trouble.
Investors long suspected Bruno had mental health issues through the only form of contact they had with him — verbal interactions in the community channels. Although clearly an intelligent man, conversations sometimes strayed into the odd, revealing a troubled mind:
Bruno eventually crystallised these concerns in his outlandish and paranoid responses to the community a day after making a run for it with their funds:
“Anyone here who has swiped a credit card or taken an interest-bearing loan has the blood of the incoming collapse on their hands. Billions of people will die, there are massive droughts and food shortages as we speak.”
In a single conversation, Bruno goes on to connect the developer team to cryptocurrencies being a ponzi scheme, bananas reaching 5000 USD and 9/11 being a inside job. This is a telltale sign of a person experiencing a manic episode.
To many, insanity seems like the only acceptable explanation for the bizarre behaviour of Oyster’s charismatic anonymous founder. Bruno admits to mental problems already as far back as the start of 2018:
“I [took] downtime to start healing from trauma I was going through.”
In his response, he further hints at fundamental disagreements between himself and his hired CEO Bill Cordes on how to run Oyster:
“Bill told the group that we got accepted on Binance. That’s when the problems started. The price immediately started pumping. I warned Bill against insider trading, he didn’t care. So instead of him and his VC friends dumping on you, I dumped on him.”
Obviously there was an unresolved lack of trust inside Oyster’s core team. Bill has repeatedly denied insider-trading by both Oyster Pearl and Binance, although many exchanges have market-making services that may be misunderstood by the inexperienced as insider-trading. But it didn’t stop Bruno from his Coup d’état of his own project:
“You don’t understand chain of command, and you’ve made so much money off of my back.”
“What will happen now: 1. Bill, you’re fired 2. I am going to program the protocol on my own.”
The community is divided on how to proceed. Bruno seems to want to complete Oyster, but can anyone trust him to be reliable again?
Some still believe in and hold on to Bruno’s “misunderstood hero” persona. But Bill’s private conversation with Bruno after the theft decisively destroyed that carefully constructed public image:
Genius and madness often go hand-in-hand. Bruno has many talents that should have been used for good. He is a logical thinker, possesses a nuanced intelligence and is calculated in his self-expression. Yet these valuable traits are tainted with illusions of grandeur —
“I sincerely want to help others, but they don’t want to help themselves.”
Exaggerated self-importance —
“If I had left you alone for months, you and everyone else would have gotten crushed.”
Deep contempt for others, as displayed in his Complaint Against the Community on Oyster Pearl’s first year anniversary:
And to top it all off, hypocrisy —
On the one hand, Bruno persistently abused his investors for participating in “ponzi games” and “thinking PRL will make [them] rich”, and on the other he abused his executive power to print millions of PRL, because he dumped his prior 7M PRL already — making him rich off of the same investors he bashed so smugly:
“It was clear throughout he didn’t care about investors, we were tools for him to cash out. If you didn’t like losing your investment due to his financial management he would gaslight you for being a “moonboi.”
From the events that transpired, it’s clear that Bruno:
- was unfit to lead a commercial enterprise
- lacked the necessary skills to manage a team
- was unwilling to follow established norms and rules of business
- and had disrespect and contempt for the investors thanks to whom his wealth was made possible.
Protected from the truth of his own existence behind an inflated ego, his greatest hubris went undetected to Bruno — that he had gotten to the top thanks to the people that supplemented his inadequacies. He wasn’t infallible, his weaknesses were simply masked by the work of others.
These difficult traits are likely the reason he wasn’t actively associated with Oyster Pearl since June 2018:
“Bruno Block is a terribly dishonest operator who went on childish rants before he had to step down as “CEO” though I’m sure he still controls the dev wallet.”
Ousted by his own project and put in direct contradiction with his own illusions about his greatness, his actions bring to mind the phrase: “If I can’t have it, no one can.”
Based on all the above revelations, we could pin this peculiar case down on the fact that Bruno is mentally ill. But the evidence also suggests that his actions were premeditated and that he is a vengeful, manipulative master in weaving divisive stories.
Post-theft, Bruno only became responsive on Telegram when his identity was discovered by the team. Making up the story on Telegram may have been his last resort attempt to rationalise his theft to his investors and manipulate them one last time now that he was vulnerable. As Bill Cordes put it:
“He hadn’t messaged or reached out since the theft. It wasn’t until he realised we knew who he was that his tune changed.”
In the investigation we led after the Tuesday incident, we were amazed at Bruno’s ingenuity and attention to detail in protecting himself when it came to the matter of concealing his true identity.
KuCoin has a thorough KYC process for projects that want to get listed. Oyster Pearl was accepted to KuCoin in December 2017, when it was just a promising “one-man” project. So we only had a single person to identify — Bruno Block.
He insisted on retaining his anonymity, so he sent us his ID in a self-corruptible file with an expiration time, promised us other identifiable persons would be hired soon and convinced the Oyster’s community manager to be liable for the project until new hires were official. Bill Cordes, the future CEO of Oyster that back then served as the CFO, would turn out to be among these people.
It was uncanny actually how close to we were at 8-Bit to pinning down Bruno’s real identity. We had 4 separate instances, where we would have had his information:
“The man is not just smart, he is lucky. He never mentioned his real name during any conversation. We did do a Skype call to check he existed and checked that against the ID he submitted, as per policy. That file was designed to self-corrupt though. We chase after another ID-check a few months later when we moved to Hubspot. But by then Bill Cordes was already there and he became the main contact for the company, so we left that alone. I tried to find a screenshot of the ID, but did not find any either. We have hope that there is a written log somewhere with his name. It’s a long shot but is worth a try.”
Matias Berra, Co-Founder of 8-Bit
But Bruno’s luck stopped there. The written log was eventually found, revealing his real identity. And Oyster had their own investigative methods with which they factually corroborated our written log, leading to a positive identification that could be handed to the authorities.
Oyster Pearl is a hard lesson for everyone. It’s not just a madman’s story, it’s a story of how everyone chose to be wilfully blind to the character of a charismatic leader, despite the signs of a rotten core. It’s also a story of how creative and effective manipulators can be at twisting us around their fingers.
Bruno had many talents that should have been used for good.
But we cannot say that the signs of problems now encountered were not there.
Bruno consistently displayed what lurks underneath his exterior, even though he was an expert at rationalising it to everyone and gas-lighting it back on anyone that questioned — telltale characteristics that accompany paranoid schizophrenia, clinical narcissism and sociopathy.
It also highlights how we need to change as a community if we want to march to the future with confidence.
We see ourselves as vigilantes disrupting established powers and the very fabric of our institutions. But we let ourselves be taken over by the anti-establishment sentiment and glorify beyond utility aspects like total anonymity and privacy. In fact, a good portion of the community defended and idolised Bruno for these. Oyster’s embezzlement is a signal that proper KYC is still important to be able to hold accountable those that stray from the right thing to do —regardless of whether due to malice or mania.
We also let ourselves be carried away by rhetoric and the fear of missing out. And in our rush forget to check, don’t notice or downplay the importance of certain uncomfortable facts. What Bruno did is highly unethical. But Oyster Pearl was and still is his company. So he has the right to fire anyone he wants to. Although hidden under semantics, he always retained the right to create more tokens too. Oyster’s whitepaper never explicitly said that there is no hard cap on the total supply of PRL. He broke our trust. But he did warn us that he was capable of that.
Going forward — could this incident serve the good?
Bruno coming unhinged is no doubt better to get over with now rather than at an All-Time-High. Now that he has permanently discredited himself and is out of the picture, the team can go on to rebuild a better and more stable project that isn’t fraught with internal struggles for leadership.
The scandal will also bring a lot of free publicity that can be used creatively to Oyster’s benefit. And it’s a lot easier to market a project without an anonymous leader, something that a lot of investors are rightly concerned about.
Bill Cordes has announced that Oyster Pearl will be forked into a new project and go through rebranding to distance themselves from Bruno. The new project will be called Opacity (OPQ).
“After executing the fork of PRL, the team plans to continue doing what we have always done: build.”