Windfall? Victims of phishing scam receive $9.3 million back from scammers of $24 million stolen

In a rare act of restitution, a phishing scammer has returned approximately $9.3 million of the $24 million stolen in a major cryptocurrency heist. The funds were returned in two transactions on 8th and 13th July.

Fraud case details

The victim lost 9,579 Lido Staked Ether (stETH) and 4,850 Rocket Pool (rETH) tokens on September 6, 2023. The scam involved fraudulent “Increase Allowance” transactions that gave the scammer control over the tokens.

The returned amount, while substantial, represents only 38.4% of the stolen funds, though the current market value of the staked Ether would be about $47.5 million.

Accidentally returned by thief

On July 6, the scammer contacted the victim of a different wallet, admitting the theft and expressing a desire to return the money.

Etherscan data confirmed the return transactions, showing the funds transferred back to the victim through Railgun Relay, a privacy protocol. The scammer’s wallet still holds over $3 million, mostly in METAGALAXY LAND (MEGALAND) tokens.

Crypto fraud risks continue to pose a threat

Frequent phishing scams

Phishing scams remain a significant threat in the cryptocurrency industry. Scam Sniffer’s 2023 Wallet Drainers Report indicated nearly $300 million stolen from 324,000 victims last year. Despite this, the cryptocurrency market shows resilience, with a record 77% recovery rate for stolen funds in Q2 2024, as noted by Hacken’s Web3 Security Report.

Social Media Scams

Social media platforms like X (formerly Twitter) continue to be hotspots for cryptocurrency scams, causing nearly $50 million in monthly losses due to account impersonation. Binance co-founder Yi He has urged Elon Musk to address the rising scam issues on the platform.

While the return of $9.3 million is a positive development, it underscores the ongoing risks and vulnerabilities in the cryptocurrency space. The high prevalence of phishing scams and social media fraud indicates that substantial efforts are still needed to protect investors and enhance security measures within the industry.