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With assistance from law enforcement and cybercrime authorities, a victim of a hack involving 90 Ether (ETH) has succeeded in having the attacker’s Tether (USDT) address blacklisted. Consequently, they may have the opportunity to recover a significant portion of their funds.
[2023/08/11 17:30] USDT blacklisted 0x788bc56b67c289399cd6e2022f0d76484f04724a in block 17893148 https://t.co/WipjkHXFGp
— usdt blacklist (@usdtblacklist) August 11, 2023
The victim, known as @l3yum on X (Twitter), was initially targeted on March 16 when the hacker gained access to their hot wallet seed phrase. Several NFTs associated with Yuga Labs were taken, along with various cryptocurrencies and NFTs from lesser-known projects, which were then quickly exchanged or sold.
In an X thread dated Aug. 11, L3yum pointed out that the hacker’s Ethereum-based USDT address had been blacklisted, stating: “Today after collaborating with the police and cyber team in my country, I was able to get the stolen funds held in USDT frozen and blacklisted.”
The individuals I collaborated with were exceptional
The initial police officer I interacted with had limited knowledge of crypto, having only heard of it, but after a few phone calls, it was evident he was learning and genuinely cared
I am very thankful— L3yum (@l3yum) August 11, 2023
At the time of this report, 90 ETH is valued at approximately $166,000, and the blacklisted wallet contains $107,306 worth of USDT, indicating that the victim may not recover the entire value of their stolen assets.
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While it remains uncertain whether the victim will be compensated, in past cases where a USDT address has been blacklisted under similar conditions, Tether has destroyed the blacklisted USDT and reissued equivalent amounts of the asset to the original owner.
It is also important to note that the blacklisting of a USDT address by Tether typically follows a court order.
Related: How easy is a SIM swap attack? Here’s how to prevent one
When questioned in the comments about this process, L3yum indicated that this was likely the case, but noted that it has not been confirmed yet.
“This is the part I’m unsure about but yeah from my understanding this is how it works and the funds that are blacklisted are essentially burnt. Don’t quote me on that though, but that is my understanding!” he stated.
The exact method by which the hacker accessed the seed phrase in March is not entirely clear; however, it was generally believed at that time that the victim may have been SIM-swapped, inadvertently backed up their seed phrase on iCloud, or used the wallet across multiple devices.
Another member of our community was compromised yesterday. $70k+ gone.
11 Eth, a Mutant, a Koda, and more. While the precise attack that @l3yum experienced is unclear, we narrowed it down to a few possibilities – and it could have been prevented by one thing
On hardware wallets 1/— quit (,) (@0xQuit) March 15, 2023
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