Daniel Yavorovych, the CTO and co-founder of Arilot, managed to do what a lot of investors that had their money stolen from hackers would want to: retrieve his money back. He then explained how it was possible to save the funds that have been previously stolen by hackers from a hot wallet.
According to the CTO of Arilot, it is not the truth that you lose your money forever once you are hacked, that is just a very popular myth of the blockchain market. However, it is far from easy to retrieve the funds, so he shared his secret to help other people that might pass for similar situations.
Arilot is a tech company which uses, among some other technologies, the blockchain. One day, Yavorovych perceived that the hot wallet of the company was emptied and about one million USD from the company had been stolen. However, there was no confirmation of the transaction yet, so this gave Yavorovych a chance to strike back.
How The CTO Defeated The Hackers
The CTO explained that, until the transaction is confirmed on the blockchain, the money is isolated for confirmation purposes, so you are still the owner of the money, you just don’t have with you anymore, but the other person still does not hold it, too. This way, the CTO devised a plan to use the slowness of the Bitcoin network in his favor.
After the tokens have been stolen, the value is sent to the Mempool and then the transaction is validated by the network to see if there is no double spending. The system is oblivious to this particular kind of scam in which someone discovers your private keys, so Yavorovych had to act quickly.
With this funds blocked, but still not on the hacker’s wallet, he decided that he would find a way to cancel the transaction before it was finished. All transactions keep waiting until the network is able to process them and the Bitcoin network is notoriously slow, he used the system to send various transactions to his own company as a way to block the other one.
As he knew that miners were always looking for the most profitable transactions, he sent transactions with high fees to the company and their confirmation was quicker than the confirmation of the money stolen by the hacker. Because of this, he was able to save the money at the end of the day.
It is because of this that it is very important for you to know how things work. Someday, you may need to abuse the system to not lose your money if you are not too careful with your private keys, so take care.