On March 16, an anonymous user who shared posts through the Twitter account L3yum became a target of an attack after a computer hacker managed to obtain their hot wallet seed phrase. While some of the victim’s NFTs, signed by Yuga Labs, were stolen, other crypto assets and NFTs were either traded or sold after the attack.
L3yum, who made a statement through the anonymous Twitter account, emphasized in a Twitter post dated August 11 that the computer hacker’s Ethereum-based USDT address was added to the blacklist:
“After working with the police and cyber team in my country today, I managed to freeze and blacklist the stolen funds in USDT.”
At the time of writing this article, 90 ETH was equivalent to approximately $166,000, and the blacklisted wallet contained $107,306 worth of locked USDT. This situation indicates that the victim may not be able to recover the total value of the stolen funds.
It is currently unknown whether the victim will be reimbursed. However, in previous cases where a USDT address was blacklisted under similar conditions, Tether burned the blacklisted USDT and reissued an equal amount to the rightful owner of the asset. It should also be noted that a USDT address being blacklisted by Tether usually occurs after a court order.
When asked in the comments if this was the case, L3yum confirmed that this was a possible solution for the future, but claimed that it had not yet been confirmed. L3yum stated the following regarding this matter:
“I’m not sure about this, but yes, as far as I understand, this is how it works, and the blacklisted funds are essentially burned. However, don’t quote me on this, but this is what I understand!”
It is unclear how the computer hacker gained access to the seed phrase back in March; however, the prevailing belief at the time was that the victim either changed their SIM card, mistakenly backed up the seed phrase on iCloud, which was made available to Apple users, or used the wallet on multiple devices.