The hacker who created a seed-phrase generator for IOTA cryptocurrency wallets in order to steal users' keys was detained by Europol on January 23. The operation to arrest the 36-year-old criminal was carried out by the South East Regional Organised Crime Unit of the United Kingdom (SEROCU) together with the National Crime Agency, Europol, and the police of the German federal state of Hesse. During the operation, electronic devices and several computers were also seized.

The investigation into the case began after complaints about cryptocurrency theft were received early last year. In particular, several such reports were filed with the Hesse police department. During the proceedings, the authorities tracked down the site Iotaseed.io, which served as a seed-phrase generator for IOTA wallets. However, there were also other sites on the network that operated on the Iotaseed.io platform. Several victims fell for the attacker's trick, as a result of which he managed to gain access to their wallets. Later he used this to transfer the assets to his own addresses. In July, law enforcement managed to establish that the hacker was operating from the United Kingdom, and the case was handed over to the Joint Cybercrime Action Taskforce (J-CAT), which is part of Europol.

Europol then organized a meeting of investigators from the United Kingdom and Germany, who subsequently tracked down the attacker. According to current data, the damage from his fraudulent activity is estimated at more than 10 million euros. He began collecting seed phrases back in August 2017, and on January 19, 2018, he carried out the attack and stole the funds. On the same day, increased activity was noticed on the IOTA network, which had been artificially created by the hacker to conceal suspicious transactions. For maximum security, the attacker even created a repository on GitHub, where the seed-phrase generator code was supposedly to be placed. As expected, the majority of users did not bother to check its contents, while Iotaseed.io could only generate identical keys.