Brazilian Tech Team Recovers $200K Stolen in Cyberattack

A group of Brazilian developers, including Afonso Dalvi of Web3 startup Lumx, collaborated with public prosecutor Alexandre Senra to recover $200,000 from an exploiter who had compromised a victim's wallet. Through persistent efforts over five months, they developed flashbots and employed "sandwich attacks" to capture the stolen funds locked in DeFi applications and return them to the victim.

Brazilian Developers Recover $200,000 Stolen from Victim in Coordinated Effort

In a remarkable display of collaboration and technical prowess, a team of Brazilian software engineers, public prosecutors, and white hat hackers have successfully recovered over $200,000 in cryptocurrency stolen from a victim in a sophisticated cyberattack. The intricate operation, which spanned five months and involved a high-stakes race against time, culminated in the restoration of the victim's funds.

The nightmare began when the victim's cryptocurrency wallet was compromised by an exploiter, who swiftly siphoned all available Ether (ETH). Desperate to recoup their losses, the victim reached out to public prosecutor Alexandre Senra for assistance. Recognizing the complexity of the challenge, Senra enlisted the expertise of Afonso Dalvi from Web3 startup Lumx and other developers to form a task force dedicated to recovering the stolen assets.

The initial hurdle lay in persuading the victim to surrender their private key, a critical component for accessing the funds. "Convincing someone to hand over the keys to their treasure is a daunting task, and it took two weeks of meticulous negotiation," explained Dalvi.

Undeterred by the initial setback, the team devised a comprehensive strategy to retrieve the remaining funds, which were locked in three decentralized finance (DeFi) applications: Pendle, Radiant, and a staking service for the PAAL AI token.

Pendle, known for its 54-day lock feature, presented a significant challenge. The exploiter had shrewdly utilized this mechanism to delay the team's access to the funds. However, the developers developed a flashbot, an automated tool designed to execute blockchain transactions swiftly, to capture the funds upon the expiration of the lock period.

"We initially attempted the capture manually, underestimating the exploiter's experience. He proved to be a formidable adversary," admitted Dalvi. "We swiftly pivoted our approach and ultimately succeeded in securing the funds during subsequent unlocking events."

Meanwhile, the team used a "scavenging bot" to monitor the victim's wallet for incoming transactions, intercepting any funds sent by the exploiter before he could use them to unlock and extract the remaining assets. The scavenging bot proved particularly effective in capturing the daily yield generated by the locked funds, amounting to approximately $130 per day.

"The exploiter consistently attempted to seize these funds, making the competition within the victim's wallet even more intense," noted Deps.

Despite the persistent efforts of the exploiter, the developers' superior technical capabilities and unwavering determination proved decisive. They successfully applied maximum value extraction (MEV) tactics to outmaneuver the exploiter, paying exorbitant gas fees to expedite the recovery process.

"We faced a formidable opponent, but we refused to give up," stated Senra. "The successful recovery of the victim's funds is a testament to the resilience and ingenuity of our team."

The stolen funds have been progressively returned to the victim, with the exception of approximately $20,000 still stored on Radiant. The team is actively coordinating with the Radiant team to facilitate the complete restoration of the victim's assets.

The successful recovery operation highlights the growing sophistication of blockchain security measures and the crucial role played by ethical hackers and developers in safeguarding the digital realm. It also underscores the importance of collaboration and the sharing of expertise to combat the evolving threats posed by cybercriminals.