Crypto whale sues Coinbase, accusing it of freezing stolen DAI and then refusing to return it

According to The Block’s report on May 6, an anonymous crypto whale identified by the pseudonym “DB” sued Coinbase and the alleged thief “John Doe” on Monday, accusing Coinbase of refusing to return frozen DAI funds tied to a 2024 crypto theft case even after Coinbase provided an affidavit proving it is the lawful owner.

Key allegations in the lawsuit and Coinbase’s position

Based on the complaint quoted by The Block, DB’s lawyer wrote in the filing: “While Coinbase’s practice of freezing the stolen crypto is reasonable, when the plaintiff provides an affidavit proving that he is the lawful owner, and Coinbase refuses to take action, Coinbase’s refusal to return the frozen funds to the plaintiff becomes unreasonable.”

According to the complaint, some of the stolen funds were traced to a Coinbase retail user account, with related information coming from blockchain security company Zero Shadow; the complaint did not disclose the exact amount of funds involved in the account.

According to the complaint, DB is asking the court to order Coinbase to return “traceable” stolen funds, and the lawyer stated in the filing: “The plaintiff claims that he is the confirmed lawful owner of the frozen crypto tied to the theft case, and that he is entitled to take immediate possession of the property.”

Timeline of the 2024 phishing attack

Based on the complaint quoted by The Block, DB suffered a phishing attack on August 20, 2024. After logging into the scam page, its wallet was attacked and DAI was stolen by the attacker using a crypto theft platform named “Inferno Drainer.”

According to The Block, although parts of the complaint were redacted, the disclosed details are highly similar to a crypto whale loss case in August 2024, in which the whale reportedly lost about $55 million in DAI.

Statistics on crypto fraud losses

According to a report released last month, crypto-related fraud losses hit a record $11.3 billion in 2024, accounting for more than half of the total $20.9 billion in internet crime losses tracked by the U.S. Federal Bureau of Investigation (FBI).

FAQ

What is the core allegation by the plaintiff “DB” against Coinbase?

According to the complaint quoted by The Block, “DB” accuses Coinbase of refusing to return frozen DAI funds related to the 2024 crypto theft case even after Coinbase provided an affidavit proving it is the lawful owner, and the complaint describes this conduct as “unreasonable.”

How were the funds traced to a Coinbase account confirmed?

According to the complaint, some of the stolen funds were traced to a Coinbase retail user account, with related information coming from blockchain security company Zero Shadow; the complaint did not disclose the exact amount of funds involved.

When did the attack involved in this case occur, and what theft tool was used?

According to the complaint quoted by The Block, DB suffered a phishing attack on August 20, 2024, and the attacker used a crypto theft platform named “Inferno Drainer” to steal the DAI held by DB.