The hacker’s wallet, with over $100,000 worth of USDT, was blacklisted and frozen,
while the victim had been drained of almost $170,000 worth of NFTs and other assets.
address blacklisted. As a result, they may be able to get most of their funds back.
The victim, who goes by L3yum on X (formerly Twitter), was initially drained on March
16 after the hacker managed to get a hold of their hot wallet seed phrase. Several Yuga Labs-
related nonfungible tokens (NFTs) were stolen, alongside some crypto and other NFTs from
smaller projects, before being promptly swapped or sold off.
In an Aug. 11 X thread, L3yum highlighted that the hacker’s Ethereum-based USDT address had
been blacklisted: “Today after working with the police and cyber team in my country,
I was able to get the stolen funds sitting in USDT frozen and black listed.”
At the time of writing, 90 ETH is equivalent to roughly $166,000, and the blacklisted wallet has
$107,306 worth of USDT locked up, suggesting the victim may not get the total value of their stolen funds back.
It’s not yet known if the victim will be reimbursed. However, in previous instances where
a USDT address has been blacklisted under similar circumstances, Tether has burned
the blacklisted USDT and re-issued equal amounts of the asset to the original owner.
It is also worth noting that the blacklisting of a USDT address by Tether generally comes after a court order.
When asked if this was the case in the comments, L3yum confirmed this was the likely path
forward but suggested it hasn’t 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 wrote.
It is unclear how the hacker accessed the seed phrase in March; however,
the general thinking at that time was that the victim had either been SIM-swapped,
mistakenly had their seed phrase backed up on iCloud, or had been using the wallet
across several devices.