Scammer Hands Back $9.3M to Phishing Victim After Nearly a Year

Jimmy Aki
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A crypto thief has had a change of heart and returned $9.3 million to a victim of a phishing attack that occurred in September 2023, approximately ten months after initially stealing $24 million.

Returned Funds Represent 38.4% of Stolen Amount

Scam Sniffer revealed on July 13 that the scammer returned the funds in Dai stablecoin, sending back a total of $9.3 million of the stolen funds across two transactions.

The first transfer worth $5.23 million was returned on July 8, followed by another $4.04 million on July 13.

It was discovered that the Dai funds passed through an address associated with Railgun Relay, a privacy protocol intermediary, before being transferred into the victim’s account. This was after the scammer contacted that victim via a different wallet address on July 6 to confirm the theft and to return the stolen funds.

Notably, the victim lost 9,579 Lido Staked Ether (stETH) and 4,850 Rocket Pool (rETH) tokens to the phishing attack that took place on September 6, 2023.

The scam succeeded when the victim inadvertently granted the scammer token approvals through “Increase Allowance” transactions, a feature of ERC-20 tokens that permits third-party spending authorization.

Meanwhile, Etherscan data reveals that the scammer’s wallet balance is slightly over $3 million after the return, with almost 99% of the funds comprising the MEGALAND token on the BNB Chain.

Phishing Scams Continue to Wreak Havoc in the Crypto Space

Phishing remains a significant threat in the crypto space, affecting many users who conduct crypto transactions daily.

According to the Scam Sniffer’s 2023 Wallet Drainers report, phishing scammers collectively stole nearly $300 million from 324,000 victims in 2023, with Inferno Drainer and MS Drainer stealing $81 million and $59 million, respectively.

In September 2023, a victim lost a staggering $4.5 million in USDT to a phishing scam after the funds were moved from the victim’s Kraken wallet to an address associated with a fraudulent Coinone crypto mining platform.

However, the crypto market has shown great resilience despite these prevalent scams, achieving a record recovery rate of 77% for stolen funds in the second quarter of 2024.

Furthermore, Hacken’s Webb Security report for the second quarter of 2024 showed that $347.4 million of the stolen crypto funds were successfully recovered or frozen out of the total $512.9 million, which is impressive.

About Jimmy Aki PRO INVESTOR

Based in the UK, Jimmy is an economic researcher with outstanding hands-on and heads-on experience in Macroeconomic finance analysis, forecasting and planning. He has honed his skills having worked cross-continental as a finance analyst, which gives him inter-cultural experience. He currently has a strong passion for regulation and macroeconomic trends as it allows him peek under the global bonnet to see how the world works.