A prominent cryptocurrency investor has launched a legal challenge against Coinbase (NASDAQ:COIN), accusing the digital currency exchange of wrongly withholding frozen digital assets tied to a large-scale theft. The plaintiff, identified in court documents only as D.B. and a resident of Puerto Rico, filed the suit on May 4 in the U.S. District Court for the Northern District of California.
Defendants include Coinbase Global Inc., its subsidiary Coinbase Inc., and an unnamed individual referred to as John Doe, described as the perpetrator behind the cybercrime.Court records indicate that the dispute centers on funds linked to a phishing attack from August 2024.
At that time, D.B. reportedly lost roughly $55 million in DAI, a stablecoin designed to maintain parity with the U.S. dollar.
The assets were held in a non-custodial Ethereum wallet managed through a decentralized finance platform.
The breach occurred when the investor was directed to a fraudulent login page that closely imitated the legitimate site. Instead of the official domain, the fake version used a different extension, allowing attackers to gain control over the wallet and associated smart contracts.
Reports at the time identified the operation as leveraging a known “scam-as-a-service” toolkit called Inferno Drainer, which has been implicated in draining hundreds of millions from victims across the crypto ecosystem.
Blockchain tracing firms later followed the stolen DAI through laundering services, including mixers, and located a portion in a standard retail account on Coinbase.
After investigators notified the exchange in late November 2024, Coinbase confirmed the presence of the traceable funds and applied security holds by early December to block any withdrawals.
The platform has since maintained that it cannot release the assets without a formal court order determining rightful ownership.
In the lawsuit, D.B. contends that Coinbase’s continued retention of the frozen holdings amounts to improper control over property that belongs to the plaintiff.
The complaint advances claims of conversion and unjust enrichment against the exchange, alongside demands for declaratory judgment confirming ownership, injunctive relief ordering the return of the assets, restitution, and equitable remedies such as a constructive trust or lien.
Against the unidentified hacker, the filing alleges violations of the Computer Fraud and Abuse Act and racketeering statutes under RICO, seeking compensatory damages, treble awards where applicable, and other penalties.
Portions of the complaint remain redacted, including specific transaction amounts and wallet identifiers, but the publicly available facts closely track the details of the widely reported 2024 incident. D.B. asserts that proof of ownership was provided to Coinbase, yet the company has declined to act without judicial intervention.
The case highlights persistent tensions in cryptocurrency recovery efforts.
When stolen assets reach regulated platforms, exchanges often prioritize compliance and legal safeguards, freezing accounts to prevent dissipation but requiring court involvement before disbursement.
For victims, this process can prolong financial losses and complicate restitution. As proceedings advance, the outcome may influence how platforms manage traceable illicit funds and clarify responsibilities in high-stakes theft recoveries.