Anonymous Whale Files Lawsuit Against Coinbase Over $55M Frozen DAI from Scam
A crypto investor, remaining anonymous, has filed a lawsuit against Coinbase regarding funds connected to a phishing theft involving DAI in 2024.
Summary
- A crypto whale alleges that Coinbase froze DAI associated with a phishing theft but has not returned the funds.
- The plaintiff contends that an Inferno Drainer attack resulted in a loss of around $55 million in DAI due to a fake login page.
- This case may set a precedent regarding how exchanges handle frozen cryptocurrency when victims present proof of ownership post-theft.
The plaintiff asserts that the exchange froze identifiable assets but refused to return them unless a court order was obtained.
The lawsuit implicates Coinbase and an unidentified alleged thief. The plaintiff, referred to as “D.B.,” claims to have lost about $55 million in DAI after accessing a counterfeit page that allowed the attacker to seize control of his wallet.
Plaintiff states stolen DAI was transferred to Coinbase
The legal complaint alleges that the incident occurred on August 20, 2024. The suspected thief utilized Inferno Drainer, a phishing tool associated with wallet-draining attacks, to transfer DAI from the plaintiff’s wallet.
The filing indicates that blockchain security firm Zero Shadow traced part of the stolen funds back to a Coinbase retail account. Coinbase reportedly froze the assets after being notified but allegedly refused to release them without a court order.
While D.B.’s legal representatives acknowledged that Coinbase acted appropriately by initially freezing the funds, they argued that its stance became “unreasonable” once the plaintiff provided sworn proof of ownership.
He is requesting the court to mandate Coinbase to return the identifiable stolen assets, although the specific amount held in the Coinbase account remains undisclosed in public documents.
Case reflects previous $55M DAI theft
This case closely parallels a significant DAI phishing theft reported in August 2024. During that incident, a whale address lost $55.47 million in DAI after approving a fraudulent transaction, according to related reports.
The new lawsuit appears to be linked to the same 2024 incident, with reports indicating that the victim engaged blockchain investigators and that the stolen funds were subsequently traced to a Coinbase account.
The reported attack involved a counterfeit DeFi Saver login page, and the victim claims he did not notice the site ending in “.app” rather than the legitimate domain.
The attacker reportedly utilized additional wallets and laundering tools to move the stolen funds. The lawsuit now brings the recovery dispute into a federal court instead of relying solely on negotiations with the exchange.
Legal questions around fraud recovery proceed
This case addresses a prevalent challenge in recovering from crypto thefts. Exchanges often freeze suspicious funds when victims or investigators sound the alarm, yet legal orders are typically required before assets can be released.
This practice helps exchanges avoid mistakenly returning funds to the wrong individual and can also prolong recovery for victims who assert clear ownership of identifiable assets.
The overarching issue of fraud remains serious, as a recent report noted that the FBI’s 2024 IC3 data reflected total scam losses of $16.6 billion, with crypto investment fraud accounting for $5.8 billion.
Furthermore, another update highlighted that U.S. Treasury officials have identified mixers, DeFi tools, and cross-chain systems as channels that criminals might exploit to transfer stolen cryptocurrency.
As of the last update, Coinbase had not publicly responded to the reports. The court will now determine whether D.B. has provided sufficient evidence to reclaim the frozen DAI.