Phishing Scammer Returns $9.3M to Victim 10 Months After $24M Heist

A victim of a phishing scam has received a significant portion of their stolen funds back ten months after falling victim to a $24 million heist.

The incident, initially reported by Scam Sniffer on July 13, revealed that the scammer utilized Dai stablecoin to return nearly $9.3 million of the stolen funds across two transactions.

According to Etherscan data, the first transfer amounting to $5.23 million was returned on July 8, followed by another $4.04 million sent on July 13 at 12:06 pm UTC.

User Loses Funds in Phishing Attack

On September 6, 2023, the user lost 9,579 Lido Staked Ether (stETH) and 4,850 Rocket Pool (rETH) tokens in the phishing attack.

The scam involved the victim unwittingly enabling token approvals to the scammer through “Increase Allowance” transactions, a feature of ERC-20 tokens allowing third-party spending rights.

At current market values, the returned $9.3 million represents approximately 38.4% of the stolen funds based on prices from the time of the theft.

Notably, the staked Ether alone would be valued at around $47.5 million at today’s prices.

💰 The scammer returned $9.27M in DAI to the victim.

(credits: @bax1337) https://t.co/xwSASQOUis pic.twitter.com/T5vF1Ak3wo

— Scam Sniffer | Web3 Anti-Scam (@realScamSniffer) July 13, 2024

The Dai funds were traced back through an address associated with Railgun Relay, a privacy protocol intermediary, before being transferred to the victim’s account.

It is worth noting that the scammer also reached out to the victim via a different wallet address on July 6, admitting to the theft and expressing a desire to return the money.

Following the return, the scammer’s wallet balance, as seen on Etherscan, now stands at slightly over $3 million.

Notably, a significant portion of these funds, nearly 99%, comprises the METAGALAXY LAND (MEGALAND) token from the BNB Chain.

Phishing Scams Continue to Plague Crypto Industry

According to Scam Sniffer’s 2023 Wallet Drainers Report

, phishing scammers collectively stole nearly $300 million from 324,000 victims in 2023 alone.

Notorious actors such as Inferno Drainer and MS Drainer were responsible for substantial sums, with Pink Drainer emerging prominently this year before its operations ceased in May after stealing over $85 million.

Meanwhile, the restitution comes as the cryptocurrency market has shown great resilience in the face of adversity, achieving a record recovery rate of 77% for stolen funds in the second quarter of 2024.

In Q2 2024, $347.4 million of the stolen crypto funds were successfully recovered or frozen out of the total $512.9 million lost, according to Hacken’s Web3 Security Report Q2 2024.

“For the second consecutive quarter, the silver lining amid the alarming rate of theft in crypto is the amount of funds recovered,” the report wrote.

It is worth noting that cryptocurrency scams have thrived on X, with analysts attributing a significant portion of all crypto scams to scammers on the platform.

Scam Sniffer, a web3 anti-scam company present on X, conducted an analysis revealing that nearly $50 million is lost each month due to account impersonation on X.com.

Just recently, Binance co-founder Yi He raised concerns about the proliferation of cryptocurrency scams on X, questioning whether Musk would take action to tackle the issue.