A Puerto Rican man is suing Coinbase after he accused the exchange of wrongly withholding crypto that was apparently stolen in a $55 million draining hack.
The suit, which was filed on Monday in a California court, claims that the man, referred to as “D.B.,” was a victim of a hack on August 20, 2024.
The victim apparently lost his crypto after clicking on a malicious link that spoofed Ethereum DeFi management tool “DefiSaver.” He then unknowingly authorized a smart contract permission that gave the thieves control of his crypto wallets.
From here, they allegedly stole his funds, made up of stablecoin $DAI, and used crypto mixing services like Tornado Cash to launder the funds before eventually depositing them on Coinbase.
Coinbase froze the funds held in a retail account after the plaintiff’s agents, Zero Shadow and Five Stones, traced the funds and requested their freezing. The exchange, however, refused to return the crypto unless a court order was secured.
The suit further alleges that, “While Coinbase acted reasonably in freezing the stolen cryptocurrency, its refusal to return the frozen funds to plaintiff became unreasonable when plaintiff provided sworn proof that he is the rightful owner and Coinbase refused to act.”
Coinbase lawsuit matches up with $55M $DAI hack
The victim’s name, the total amount stolen, and other details are redacted from the lawsuit, but the certain events appear to line up with reports around August 20 and 21 covering a $55 million $DAI draining incident.
🚨 5 hours ago, a victim lost $55.43M in $DAI after signing a phishing transaction targeting its DeFi Saver Proxy.
How did this happen? 👇 pic.twitter.com/YyGHf5k9pg
— Scam Sniffer | Web3 Anti-Scam (@realScamSniffer) August 21, 2024
These include details like the “Inferno Drainer” malware used in the attack, the theft of the $DAI, and the manipulation of the smart contract.
Crypto analysts at the time noted that the victim had acted “carelessly” when signing the transaction, and that he attempted to reverse the transaction upon realising that it was malicious.
The lawsuit, which describes the hack as “sophisticated,” is suing Coinbase on five counts, including unjust enrichment, and is seeking restitution for any profits the exchange may have accrued from holding the funds.
It also seeks a court order declaring that the plaintiff is the rightful owner, an order directing Coinbase to return the funds, and the “imposition of a constructive trust.”
The lawsuit is also suing John Doe, a legal name used to highlight the currently unknown hacker, or hackers, who stole the crypto. They face seven counts, including fraud, theft, and racketeering.
The plaintiff claims to have found one suspect, a Ukrainian called Oleksiy Oleksandrovych Goreliikhin, who allegedly played a significant role in laundering the funds.
Protos has reached out to Coinbase for comment and will update this piece should we hear anything back.