Crypto whale sues Coinbase for allegedly refusing to return stolen DAI
The Block
05-06 13:20
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The plaintiff fell victim to a phishing scam that drained his DAI holdings, with part of the funds later traced to a Coinbase user account.
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Crypto exchange Coinbase is facing a lawsuit from an anonymous crypto whale who alleges the company improperly refused to return frozen funds tied to a 2024 crypto theft.

The plaintiff, identified only as "D.B.," filed the lawsuit on Monday against both Coinbase and "John Doe," the alleged thief. While the filing was partially redacted, the disclosed details closely mirror those of an August 2024 crypto theft, where a crypto whale lost roughly $55 million worth of DAI (DAI).

According to the complaint, D.B. fell victim to a phishing scam on Aug. 20, 2024, after logging into a fraudulent page that ultimately gave the thief access to his wallet. The attacker reportedly drained his DAI holdings using "Inferno Drainer," a platform designed to facilitate crypto theft. 

A portion of the stolen funds was later traced to a Coinbase retail user account, according to the filing, which cited blockchain security firm Zero Shadow. The amount of funds stored in the account was not revealed in the filing.

Coinbase froze the assets after D.B. notified the exchange, but declined to release them back to the plaintiff without a court order adjudicating ownership. 

"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," attorneys for D.B. said in the filing.

D.B. is seeking a court order requiring Coinbase to return the "traceable" stolen funds.

"Plaintiff contends that he is the rightful owner of the identified frozen cryptocurrency traceable to the theft and that he is entitled to immediate possession of that property," said the lawyers.

The Block has reached out to Coinbase for comment.

Crypto-related fraud has been on the rise, with losses hitting a record $11.3 billion last year, accounting for more than half of the $20.9 billion in total internet crime losses tracked by the FBI, according to a report released last month.


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