Why Did an Ethereum Hacker Return $3 Million?

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Cryptocurrencies are not just an incredibly popular trend among investors, they have also drawn the attention of individuals with more nefarious plans as well. Initial coin offerings (ICOs) have been subject to a string of hacks, jeopardizing investor funds. Bitcoin and other cryptocurrency exchanges struggle with maintaining security in the face of fraudulent dealers and hackers all the time. The problem has grown so significant, in fact, that the Chinese government recently blocked all digital currency exchanges from the country, citing the risks of fraud, money laundering, and terrorism as some of the reasons for the shutdown. Now, in a surprising turn of events, and alleged ethereum hacker has returned $3 million of stolen funds to a victim. Why might this have happened?

CoinDash ICO Offered Hacking Opportunity

Back in July, the ethereum-based startup CoinDash launched an ICO to raise funds for its new project. Investors interested in supporting the company were instructed to send ether to a CoinDash-linked address in exchange for tokens in the new currency. However, as the ICO launched, it seems that a hacker replaced the CoinDash address on the fundraising website with a separate address that the hacker was in control of. In the span of just minutes, unwitting investors sent more than $7 million in ether to the fake address, paying the alleged hacker rather than CoinDash. Between the CoinDash ICO and the middle of September, the value of ether increased considerably, meaning that the stolen funds were valued at more than $10 million after the price adjustment.

According to Vice, CoinDash revealed in a blog post earlier this week that the alleged hacker had returned about $3 million of the stolen funds. This accounts for about a quarter of the stolen ether; the return transaction is listed on the public blockchain, allowing independent analysts to verify it. The wallet associated with the hacker still contains more than $8 million, and about $130,000 has been cashed out so far.

Why the Change of Heart?

The question on the minds of all of those involved is why the thief would decide to return some of the stolen funds. Alon Muroch, the CEO of CoinDash, explained that his company has “not been contacted by the hacker, or anyone related to the hacker. A hacker steals a lot of money and out of the blue returns some of it…it’s truly incredible, this industry,” Muroch said.

In response to the ICO hack, CoinDash worked to ensure that everyone who had submitted ether received their share of tokens. Vice reports that the company believes that “everything is square with their investors” and the returned funds from the hacker will be applied to further developing the company platform. An investigation into the hack is reportedly ongoing.