As a non-custodial service, we don't store seed phrases but with the help of this information, we are able to check the history of transactions and see how many of them have been performed through Blender Wallet.
Couldn't you do all this without asking for the user's seed phrases? You could for instance have asked for a list of addresses with signed messages to prove ownership.
First of all we asked users to check their wallet balance through Electrum. If balance is positive, we asked them to send all funds to another wallet. If balance equals 0, then it is easier for customers and our support to use seed phrases for investigation and proofing, that funds were stollen (some users send funds to their own wallets and pretended, that their funds were stollen). Anyway, after attack we don't recommend to use seed phrases generated earlier on Blender Wallet.