365Crypto
Shezmu Recovers Stolen Crypto Funds Through Negotiation
Crypto lending platform Shezmu successfully recovered almost $5 million in stolen funds by negotiating directly with a hacker.
The Hack and Quick Response
On September 21, Chaofan Shou, co-founder of blockchain analytics firm Fuzzland, alerted the community about a compromised storage vault belonging to Shezmu. About $4.9 million worth of crypto was stolen. While it was unclear whether the breach was a result of a hack or an internal scam, Shezmu confirmed that one of its stablecoin vaults (ShezUSD) had been exploited.
Negotiating With the Hacker
In an attempt to recover the stolen funds, Shezmu sent an on-chain message offering the hacker a 10% bounty and a promise of no legal consequences if the funds were returned. Leveraging the fact that a wallet address used in the hack is linked to a KYC verified exchange account.
The hacker, realising his big mistake, demanded a 20% bounty instead. Shezmu agreed to the higher bounty to facilitate the recovery.
Returning the Stolen Funds
After the agreement, the hacker began returning the stolen crypto, initially sending back 282.18 Ether (ETH) and later 137 Wrapped Ether (WETH). Some funds were still missing, and Shezmu advised investors to minimize interactions with the protocol’s Oasis vault until further notice.
The Outcome
Through these negotiations, Shezmu managed to recover a large portion of the stolen funds within hours, showcasing a growing trend in the crypto world where ethical negotiations, rather than legal action, are being used to recover assets.
Stablecoin: A type of cryptocurrency that is pegged to a stable asset like the U.S. dollar to reduce volatility.
On-chain message: A communication sent through the blockchain, visible to anyone, but often used in crypto for secure messaging.
