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Victim Poised to Recover Stolen Ethereum after Hacker’s Wallet Blacklisted

by Dan K
Aug 12, 2023 - 3:00 pm
in Blockchain
Image depicting a digital representation of the CoinsPaid cybersecurity breach, showcasing symbols of cryptocurrencies like Binance and Ethereum.

The Heist and Initial Loss

On March 16, the crypto community was abuzz with the news of L3yum’s unfortunate loss. The victim, recognized by their pseudonym L3yum on X (formerly Twitter), faced a significant loss after a hacker compromised their hot wallet seed phrase. In this sophisticated attack, the criminal did not only target Ethereum. They pilfered various assets, including Yuga Labs-related NFTs and other tokens from minor projects. These assets were quickly traded or sold, making immediate recovery seem nearly impossible.

Blacklisted and Halted

However, things took a turn for the better on August 11. In a detailed X thread, L3yum shared a hopeful update: authorities had successfully blacklisted and frozen the hacker’s Ethereum-based USDT address. This intervention was the result of L3yum’s diligent work with the police and a specialized cyber team in their country.

Financial Implications

With the current market rate, 90 ETH amounts to an approximate value of $166,000. The frozen USDT in the blacklisted wallet stands at a value of $107,306. This discrepancy in amounts indicates that, while L3yum may be on the path to a significant recovery, it might not encompass the full value of the stolen funds.

Potential Reimbursement?

Instances in the past offer a shimmer of hope. Historically, when a USDT address faces blacklisting under similar circumstances, Tether has undertaken to burn the blacklisted assets and re-issue an equal amount to the legitimate owner. Most of these actions, it’s essential to note, are usually precipitated by a court order.

L3yum, while optimistic about the outcome, remains unsure about the exact process. They shared in a comment, “From my understanding, the blacklisted funds get burnt. However, this is based on my limited knowledge, so take it with a grain of salt.“

Mystery Remains

The actual method used by the hacker to obtain L3yum’s seed phrase remains a topic of speculation. Some believe it could have been a SIM-swap, an inadvertent iCloud backup of the seed phrase, or L3yum accessing their wallet on multiple devices, thereby exposing their private information.

For now, the community waits and hopes for a positive resolution, and the incident serves as a stark reminder about the importance of robust digital security.

Tags: BlockchainHackWallet
Dan K

Dan K

Dan K, the chief editor, is a visionary wordsmith, shaping narratives with finesse. His discerning eye for detail creates literary masterpieces.

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