- Coinbase faces a lawsuit over frozen DAI linked to a $55 million phishing theft in 2024.
- Zero Shadow traced part of the stolen DAI funds to a Coinbase retail user account.
- Coinbase layoffs and AI restructuring surfaced alongside the ongoing legal dispute.
Crypto exchange Coinbase is facing a lawsuit from an anonymous crypto investor who claims the company improperly withheld access to frozen digital assets connected to a major 2024 theft involving the stablecoin DAI.
The plaintiff, identified in court documents only as “D.B.,” filed the complaint Monday against Coinbase and an unnamed defendant referred to as “John Doe,” who is alleged to be responsible for the theft.
The filing centers on an August 2024 phishing attack that reportedly resulted in the loss of approximately $55 million worth of DAI. According to the complaint, the investor accessed a fraudulent website on Aug. 20, 2024, which allegedly allowed the attacker to gain control of the victim’s wallet and drain the holdings.
Court filings state that the stolen assets were moved using Inferno Drainer, a crypto theft platform commonly associated with phishing-related attacks. Blockchain security firm Zero Shadow later traced part of the stolen funds to a Coinbase retail account, according to the lawsuit.
Coinbase Reportedly Froze Funds but Declined Release
The complaint states that Coinbase froze the identified assets after being notified about the theft. However, the exchange allegedly refused to release the frozen cryptocurrency back to the plaintiff without a court order formally establishing ownership.
Attorneys representing D.B. argued that Coinbase initially acted reasonably by freezing the funds but later became unreasonable after the plaintiff submitted sworn documentation claiming ownership of the assets.
According to the filing, D.B. is seeking a court order directing Coinbase to return the “traceable” cryptocurrency tied to the theft. The lawsuit argues that the plaintiff remains the lawful owner of the frozen assets and is entitled to immediate possession.
Lawsuit Emerges During Coinbase Workforce Restructuring
The legal dispute surfaced as Coinbase continues a broader internal restructuring effort focused on cost reductions and operational changes tied to artificial intelligence.
Earlier this week, Coinbase confirmed that it reduced its workforce by approximately 14%. Chief Executive Officer Brian Armstrong said the layoffs were part of a strategy to transform the company into a “lean, fast, and AI-native” organization.
The reductions reportedly affected Asia-Pacific growth teams involved in expanding Base, Coinbase’s Ethereum Layer-2 network, across Southeast Asia. Armstrong stated in a public message that advances in AI have greatly changed internal workflows, enabling smaller teams to complete tasks that previously required larger operational resources.
Related: Coinbase Faces Lawsuit Over Alleged Breach of Illinois Biometric Privacy Laws
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