Arthur Cheong, the founder of DeFi and crypto gaming fund DeFiance Capital, has had $1.7 Million.
The founder of DeFiance Capital, Arthur Cheong, has been defrauded of over $1.7 million in NFTs.
The stolen pieces included five CloneXs, 17 Azukis, 33 Second Selfs, two Hedgies, and two Tsubasa NFTs, according to a security firm. The firm reported that approximately 59 NFTs were stolen.
“Well, this hit me hard but if I got exploited as a fairly sophisticated 5 years crypto user (DeFi user, password manager, mostly hardware wallet), I’m not sure how I can persuade most normal people to put a substantial part of their net worth on chain anymore,” tweeted Cheong.
A spear-phishing email that appeared to be from one of DeFiance Capital’s portfolio companies was the likely root cause, according to a venture capitalist. The private key of one of Cheong’s hot wallet was gained access to by the attacker after opening the file.
The address in question is currently holding more than 585 ether and has been labeled as the “Arthur0x wallet hacker” by a tracking service.
A “hot”cryptocurrencies wallet is one that is connected to the internet at all times, which makes them vulnerable to attacks.
Today’s events reveal that they are not ideal for storing large amounts ofcryptocurrencies. Paper wallet and hardware wallet are physical devices that are offline and are not connected to the internet. These aren’t hack-proof but they have a better degree of security.
NFTs’ bumper year
The latest NFT wave was jumped aboard by an experienced DeFi enthusiast.
“Was pretty careful and stuck with only using hardware wallet on PC until I start trading NFT more regularly,” wrote Cheong.
Given the rise in popularity of digital collectibles, it isn’t surprising.
Large brands have joined the craze and celebrities have as well. The NFT marketplace called Autograph was launched by Tom Brady.
A recent report indicated that NFTs might be related to the broader market. This correlation only shows up when the NFTs are in ether.
The recent theft of a crypto-native should serve as a reminder for users to remain vigilant no matter which market they are in.
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