Arthur Cheong, the founder of DeFiance Capital, was recently the target of a hot wallet assault. A total of $1.6 million in crypto and NFTs was lost due to the breach.
The crypto community has rallied to Arthur’s aid, supporting him in recovering his funds. The community also asked that the hacker’s wallet be blocked.
“Cirrus,” a member of the NFT community, chose to assist Arthur. He bought two stolen Azuki NFTs and promised to sell them to Arthur at a discount.
Arthur encountered a major loss
Hackers took the following assets from Arthur’s wallet:
- 68 WETH (~$204,000)
- NFTs, including 17 Azuki’s, sold below floor price at 10 ETH to 50 ETH and cashed out a total of 223 ETH (~$669,000)
- 5 CloneX, with one sold at 12 ETH
- A batch of 4 CloneX for 40 ETH
Even though different platforms banned the hacker’s address, he managed to move the Azuki’s to another address and then switch to payout.
This demonstrates that the hacker was well-versed in the whole NFT platform and was capable of targeting additional collectors.
Are the assets secure in hot or cold wallets?
In contrast to cold wallets, hot wallets are more vulnerable to frequent and easy exploitation. This is due to the fact that hot wallets are linked to the internet.
He further claimed that the hacker had access to a second hot wallet connected to his PC, with separate private keys and seed phrases.
It was a targeted social engineering attack, he determined. It all started when he got a phishing email with what appeared to be industry-relevant material.
“Have substantial proof that this is the same gang of hackers that abused BZX, Hugh, MGNR, and myself – the infamous Lazarus group,” he claimed.
As more individuals join the crypto bandwagon, scams and exploits appear to rise. Every minor weakness seems to be exploited and taken advantage of by hackers.
People must be highly cautious when connecting their wallets to websites and be aware of phishing emails posing as regular clients.