Anonymous Crypto Whale Sues Coinbase Over Frozen Funds Tied to $55 Million DAI Theft

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An anonymous plaintiff has sued Coinbase in federal court for refusing to release frozen cryptocurrency traced to a 2024 phishing attack that drained roughly $55 million in DAI from the plaintiff’s wallet. Coinbase froze the funds after being notified of the theft but declined to release them without a court order adjudicating ownership.

The Theft Used Inferno Drainer to Empty the Plaintiff’s DAI Wallet in August 2024

The plaintiff, identified only as “D.B.” in a partially redacted complaint filed Monday, said he logged into a fraudulent page on August 20, 2024, that gave the attacker access to his wallet. The thief drained his DAI holdings using Inferno Drainer, a platform built to facilitate crypto theft.

Blockchain security firm Zero Shadow later traced a portion of the stolen funds to a Coinbase retail user account, according to the filing. The complaint does not disclose how much of the stolen DAI ended up on Coinbase.

The details in the filing closely match a publicly reported August 2024 incident in which a crypto whale lost approximately $55 million in DAI through an Inferno Drainer phishing exploit.

Coinbase Froze the Assets but Refused to Return Them

Coinbase froze the traced funds after D.B. notified the exchange. The exchange then declined to release them back to the plaintiff without a court order adjudicating ownership, according to the complaint.

D.B.’s attorneys argued that Coinbase’s initial freeze was reasonable but that its continued refusal to return the funds crossed a line.

“While Coinbase acted reasonably in freezing the stolen cryptocurrency, its refusal to return the frozen funds to Plaintiff became unreasonable when Plaintiff provided sworn proof that he is the rightful owner and Coinbase refused to act,” the filing states.

D.B. Wants a Judge to Order Coinbase to Hand Over the Frozen Funds

D.B. is seeking a court order compelling Coinbase to return all frozen cryptocurrency that is traceable to the theft. The suit names both Coinbase and “John Doe,” the unidentified alleged thief, as defendants.

“Plaintiff contends that he is the rightful owner of the identified frozen cryptocurrency traceable to the theft and that he is entitled to immediate possession of that property,” the attorneys said.

The case raises a recurring tension for centralized exchanges. Coinbase can freeze assets flagged as stolen but faces legal risk whether it returns them to the claimed victim or holds them pending a court ruling. Releasing funds to the wrong party exposes the exchange to liability. Holding them indefinitely exposes it to lawsuits from the claimant.

Coinbase had not publicly commented on the lawsuit at time of publication.