Co-founder of Fenbushi Capital announces reward program for $42M stolen in 2022 cyberattack
Around $1.2 million has been successfully frozen by investigators as the ongoing effort to track down stolen funds from a wallet compromise involving seed phrase exposure continues.
Bo Shen, who co-founded the venture capital company Fenbushi Capital, has announced a bounty program aimed at recovering approximately $42 million worth of cryptocurrency that was taken from his personal digital wallet during a 2022 cyberattack.
On Thursday, Shen announced he would provide a bounty ranging from 10% to 20% of the recovered funds to any person or entity that contributes significantly toward the successful retrieval of the stolen assets. According to Shen, blockchain investigators ZachXBT and Taylor "Tayvano" Monahan have already assisted in freezing approximately $1.2 million worth of connected assets. He indicated that his team plans to distribute the rewards after the recovery process has been completed.
The bounty announcement brings renewed attention to an incident that Shen initially made public in November 2022, when he revealed that approximately $42 million in cryptocurrency had been stolen from his personal digital wallet. During that initial disclosure, he clarified that the missing funds were his personal holdings and had no impact on entities associated with Fenbushi.
According to blockchain analytics firm SlowMist, the security breach occurred due to the compromise of Shen's mnemonic seed phrase. Shen explained that the decision to renew recovery efforts followed the development of fresh leads by investigators and a more comprehensive understanding of the movement patterns of the stolen cryptocurrency, although he acknowledged that successful recovery remains far from guaranteed.
According to SlowMist's analysis, the compromised assets consisted of approximately $38.2 million in USDC (USDC), 1,607 Ether (ETH), nearly 720,000 USDt (USDT) and 4.13 Bitcoin (BTC). The stolen cryptocurrency was subsequently transferred through various exchange platforms, including ChangeNow and SideShift.
Shen says improved tracing tools expanded recovery efforts
According to Shen, the blockchain tracking capabilities and security investigation technologies available at the time of the 2022 hack were significantly less sophisticated, which constrained investigators' capacity to follow funds as they moved across different blockchains and platforms.
He noted that recent developments in artificial intelligence-powered data analytics and blockchain forensics have substantially enhanced investigators' capabilities to monitor asset movements and recognize important transaction patterns.
According to Shen, this recovery initiative could potentially function as a benchmark case demonstrating how emerging tools and collaborative approaches can facilitate investigations that span extended timeframes. He emphasized that the incident demonstrates how technological advancements may broaden the scope of what can be achieved when tracing and addressing cryptocurrency-related security breaches.
Nevertheless, successful recovery of the stolen assets remains highly uncertain, despite the availability of enhanced tracing capabilities and new investigative leads.