David Sonstebo is a serial entrepreneur, heavily involved in Internet-of-Things (IoT), and distributed ledger technologies, including blockchain and Tangle, smart cities, digital identity, eGovernance, and innovative hardware design. Sonstebo is an angel investor, co-founder, and co-chairman of IOTA Foundation, the cryptocurrency project that is based on the distributed ledger called Tangle. He is also the director of Simuli, formerly known as IoTIFY Virtual Labs.
In 2014, David founded TBA/Stealth in Norway and took on the role of CEO. This IP start-up specialized in developing ultra-low-power processors for IoT. A year later, in 2015, he co-founded IOTA with Dominik Schiener and Sergey Ivancheglo. By October 2017, he had ascended to the position of co-chair at the IOTA Foundation.
Parting Ways With IOTA
In 2018, the IOTA board announced it had separated from David Sonstebo, stating that their interests had 'diverged significantly' from those of the co-founder. The decision was unanimously made by the Supervisory Board in the best interest of IOTA and its ecosystem. Subsequently, David's photo was removed from the IOTA website, and emails to his address began to bounce back. IOTA said:
The decision to part ways, while difficult, had to be made. There were several instances where David's actions were not aligned with what the Foundation stands for and who we aspire to be.
David voiced his opposition to the appointment of a CEO, a move that was overruled by the IOTA Foundation board. He also expressed disagreements regarding the ownership of several upcoming IOTA ecosystem projects. He said,
The Board started panicking about its negligence of the IF’s finances and they subsequently stepped in to claim these projects in order to ensure an ever-growing runway at the cost of IOTA’s ecosystem actually growing. I refused the board taking ownership of these projects and their potential future revenue streams.
After months of internal discussions regarding the election of a CEO, tensions came to a heated exchange on the organization's internal Slack channel. David Sonstebo asked Dominik Schiener, the Chairman of the Board, to resign. David also addressed various Board members directly; he asked one to stop identifying as a co-founder due to their lack of participation in meetings and another for not collaborating more closely with him. Sergey Ivancheglo opined that calling for Dominik's resignation was unjust, emphasizing that IOTA had been developed over many months with collective effort. David later suggested that this disagreement was the primary catalyst for his departure from the organization.
Despite parting ways, the foundation affirmed that he would always be recognized as the founder of IOTA. Sonstebo concluded:
There will be further details on my plans for IOTA coming early next year. Don’t worry. I will continue to work on IOTA with Foundation members, community members and external partners. This is not the dot at the end of the final chapter’s last sentence; it’s merely a comma.
Hacked Victims Repayment
On February 12, 2020, IOTA's official desktop wallet was targeted in an attack, resulting in the IOTA network going offline that same day. The network remained inoperative for approximately two weeks. On March 6, 2020, David Sonstebo announced that he would personally compensate all 46 victims of the hack, totaling 8.52 million MIOTA (MegaIOTA), which was roughly valued at $1.97 million at that time. He confirmed his intention to cover all losses from his own funds and also stated that the IOTA Foundation planned to relaunch the network on March 10, 2020. When he was interviewed about the hack, he replied saying:
The hack itself was on MoonPay's infrastructure, but due to the way it was integrated into the Iota wallet, there was a vulnerability that was exploited by the hacker. The total amount of iotas siphoned out of accounts were 8.52 Ti.
While he was asked directly for information about repaying the victims and the total that would cost him, David stated:
I did not start Iota with the goal of making myself or my co-founders rich. This is why we are the only project to not have a pre-mine or special allocation of tokens of any sort; Iota is truly grassroots. Our goal is to build the world's first truly decentralized, scalable, and fee-less DLT to catalyze a secure autonomous future and permissionless innovation in a plethora of industries. We are closer than ever to achieving precisely the goal we set out to reach several years ago. Thus, I chose to use my personal holdings (which I haven't touched in 2 years) to safeguard the Iota Foundation's runway. This way we can continue delivering on this ambitious goal unperturbed. I want to emphasize that no individual inside the organization is at fault for this, and that I have never been more proud of the team we have built than now. It will cost around ~2 million USD. This is definitely a lot of money, but if my primary motive was money I have had ample opportunity over the last 2 years to maximize my profits. I have not. For me, the chief goal is to build this future, based on our vision. Hopefully, the culprit will be held accountable one day and the funds recovered. The chances are low, but we did it once before.
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