Crypto Whale Recovers $71M in Stolen Bitcoins After Negotiating with Hacker

According to CryptoPotato, a cryptocurrency investor who lost $71 million in wrapped bitcoins (WBTC) through a dusting attack has successfully reclaimed the stolen funds following discussions with the hacker. The recovery process began on May 9 and was completed by May 11, as reported by blockchain security firm PeckShield.

The investor's troubles started on May 3 when they accidentally sent 1,155 WBTC to an incorrect address due to an address poisoning attack. In such scams, a malicious actor sends a transaction of little or no value to a victim's wallet, causing the address to appear in their transaction history. The fraudulent addresses often have similar starting and ending characters to the victim's genuine wallets, making them hard to detect. In this case, the victim was deceived when attempting to transfer their WBTC to another wallet.

The hacker did not touch the stolen assets until five days later, when they began to split the stash into smaller amounts. They used over 400 wallets to distribute the funds to approximately 150 addresses. Interestingly, they had converted the stolen assets to around 23,000 ether (ETH) on May 3.

Details of the negotiations between the hacker and the victim are not available, but it is known that the victim first contacted the hacker on May 5, offering a 10% reward for the return of the stolen funds. With the help of blockchain cybersecurity firm Match Systems and crypto exchange Cryptex, the victim threatened to track the funds if the hacker did not respond by May 6. After a few days of silence, the hacker sent some ETH to the victim along with a message requesting their Telegram handle for further discussions. The hacker then returned the stolen assets in installments.

It is unclear why the hacker returned all the assets, ignoring the 10% reward offer. The value of the returned assets is currently around $66.8 million due to the recent decline in the value of ether compared to BTC. According to CoinMarketCap data, ETH fell over 6.4% while BTC dropped about 2.8% within the same period.