The founder of the large crypto-investment firm DeFiance Capital “Arthur_0x” was hacked into one of his hot wallets, resulting in the loss of more than $ 1.6 million in non-fungible tokens (NFT) and cryptocurrencies.
By showing great support, the crypto community came to his aid to help recover stolen items when people were asked to blacklist the hacker’s wallet. Several people on Twitter have tried to find out exactly how the hack happened and how the hacker gained access to the wallet.
NFT community member “Cirrus” went so far as to purchase two stolen Azuki NFTs and decided to return them to Arthur at cost price. Cyrus told the Cointelegraph on Tuesday that,
“He found out they had been hacked, and instead of selling them for a profit like the others who got some of it, I thought I would sell them back to him for a cost to help him.”
Cyrus added that this was not the first time this had happened to him. He said, “I can easily sell it at a profit of 6-8 ETH, but that’s not true.” His profile indicates that he was the victim of a blanket three times already, which probably led his sympathies to another victim.
A carpet pull occurs when a crypto or NFT project suddenly closes and the value of the token or NFT drops without warning. In most cases, pulling the rug is evidence of a scam.
In total, Arthur lost 78 different NFTs from five groups, mostly to Azuki. It also lost 68 encapsulated ether (wETH), 4349 DYDX tokens (pcsDYDX) and 1578 LooksRare (LOOKS) tokens. The hacker started transferring the assets around 00:30 UTC, and immediately put all the NFTs up for auction on the OpenSea NFT Marketplace. At the time of writing, the hacker has 545 ETH in his wallet, worth around $ 1.6 million.
This hack highlights the importance of operational security in the self-storage of cryptocurrencies, where even people at the highest levels in the industry can be attacked. In Arthur’s case, he was surprised by what happened to him when he tweeted: “Mobile hot wallet is really not secure enough”.
If Arthur had used a hardware wallet, also known as a cold wallet, he would still not be immune to this attack. Unlike a hot wallet, a hardware wallet is not always online. This feature can protect your private key and seed phrase from snooping. However, Arthur believes that the security breach was due to a transaction he made on the network, which could also have broken the raw gateway or the private key from the hardware wallet.
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NFT fraud and crypto fraud are always a risk, so investors should follow the strictest security measures regarding their assets. There are even serial scammers who develop projects to take advantage of the NFT community and pull the rug out and then move on to the next scam. As Cyrus noted:
“It’s a gold rush for hackers and they’re trying their best to find new ways to take advantage of it.”
In light of the frustration and irritation over the hack, Arthur spoke out strongly against the party that stole his belongings, and said on Twitter: “The only thing I can say to the hacker is that you are calling the wrong person.”