FTX-linked USDT hardware-wallet theft: Singapore ex-officer jailed 82 months
A Singapore court sentenced former Naval Diving Unit captain Zhang Rongxuan to 6 years and 10 months for a crypto theft tied to USDT losses he blamed on the FTX collapse.
The case involved a hardware cold wallet. Zhang allegedly entered a victim’s apartment, photographed the 24-word seed phrase, and used it to drain about 1.7 million USDT by Jan 1, 2023. The victim noticed the theft on Mar 23, 2023, and investigators traced the on-chain transfers.
Zhang pleaded guilty to six charges under Singapore’s Computer Misuse Act and the Corruption, Drug Trafficking and Serious Crimes (Confiscation of Benefits) Act. Police seized some assets, including luxury watches, an Audi A5 and about S$130,000 in deposits, while the rest was spent on luxury items, gambling, and debt repayment.
The court also highlighted rising “wrench attacks,” where physical access is used to steal seed phrases or hardware wallets—showing cold storage fails when seed phrases are physically compromised. For traders, this is mainly a single theft event, so direct price impact on USDT should be limited, but it can pressure custody-security narratives and near-term sentiment around stablecoin safety.
Neutral
This is a single, court-adjudicated crypto theft involving about 1.7 million USDT from a hardware cold wallet. That limits direct systemic risk to USDT’s peg, so near-term price impact on USDT itself is likely neutral.
However, the new details reinforce a shift from remote hacking to physical compromise (“wrench attacks”). That can influence trader sentiment around custody and stablecoin safety, potentially increasing short-term demand for better seed-phrase handling, physical access controls, and institutional-grade procedures. Over time, more security-focused behavior could support a sturdier market narrative for USDT, even though the event is not large enough to suggest broader market stress.