Founder of DeFiance crypto exchange hacked; $16 million USD stolen via mobile wallet. No one is safe

A recent cybersecurity report assures that Arthur_0x, founder of the cryptocurrency investment firm DeFiance Capital, was the victim of a hot wallet hack, an incident that led to the loss of more than $1.6 million USD in non-fungible tokens (NFT) and various virtual assets.

Arthur_0x would have lost a total of NFTs from five different collections, mostly from the Azuki collection. The investor also lost 68 Wrapped Ether (WETH), 4349 Staked DYDX (stkDYDX) and 1578 LooksRare (LOOKS) tokens.

The hackers behind the attack began moving the compromised assets a few hours later through the specialized OpenSea platform. At the time of writing, the cryptocurrency wallet associated with this attack showed transactions worth almost $1.5 million USD.

As the news spread, the community of cryptocurrency enthusiasts began a campaign to track the stolen assets, starting by blacklisting the attackers’ cryptocurrency addresses. It has not yet been confirmed how exactly the incident occurred.

As a sign of goodwill, the renowned NFT collector and investor identified as Cirrus bought two Azuki NFTs stolen from Arthur_0x’s hot wallet, returning them to him without increasing their price. Cirrus added that he himself has been victim of cryptocurrency scams and electronic fraud in the past, so he decided to help the victim of the attack.

Rug pull scams are the most popular variant of fraud in the cryptocurrency community. In these campaigns, cybercriminals launch new cryptocurrencies offering very low purchase prices and a performance above the usual; however, this increase in value is artificial, so a short time later the value of these cryptocurrencies plummets and cybercriminals disappear from the map, leaving investors with piles of digital junk.

Cryptocurrency and NFT scams have become a constant threat, mainly for enthusiasts unfamiliar with this technology: “This is a gold rush for hackers, who are doing their best to find new ways to take advantage of unsuspecting users,” Cirrus adds.

In this specific case, the specialist considers that everything could have been avoided if the victim had used a cold wallet, a hardware implementation for the storage of virtual assets outside the Internet. Unfortunately, it is too late for Arthur_0x, who will have to be more cautious next time.

To learn more about information security risks, malware variants, vulnerabilities and information technologies, feel free to access the International Institute of Cyber Security (IICS) websites.