Tuesday, February 7, 2023

DeFiance Capital Founder Suffered Losses Worth $1.6M In Hack

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The Defiance capital founder suffered major losses worth $1.6 million in the latest hack of the Defi platform as we can see more in today’s latest crypto news.

The hackers took out one of the biggest names in DEFI “Arthur_0x” who is the DeFiance capital founder. He warned them however that they messed with the wrong person. The founder suffered a hack of one of his hot wallets which resulted in the loss of more than $1.6 million in NFTs and crypto. In a wave of support, the crypto community came to his aid to retrieve the stolen items and asked people to blacklist the hackers’ wallets. A few individuals on Twitter attempted to determine how the hack happened and where the hacker gained access to the wallets.

The NFT community member Cirrus went as far as buying two of the stolen Azuki NFTs and decided to return them to Arthur:

“found out they were hacked, and instead of selling them for profit like the other folks who got some of his, decided I’d sell them back to him at a cost to help him out.”

Cirrus added that this is not the first time and said that he could sell them for 6-8 ETH profit but it simply wasn’t right. His profile states that he has been a victim of rug pulls a few times before which is why he had sympathies for the fellow victim. The rug pull is when a crypto or an NFT project closes down and the value of the token or NFT crashes without prior warning. The rug pulls are often a confirmation of a scam. In total, Arthur seems to have lost 78 different NFT from five collections and lost about 68 wrapped ETH as well as 4349 Staked DYDX and 1578 LooksRare tokens. The hacker started moving the assets at 12:30 AM UTC and put the NFTs up for abid on the OpenSEA NFT marketplace. The hackers’ wallet held 545 ETH worth $1.6 million.

The hack outlines the importance of operational security when dealing with the self custody of crypto assets as people being the highest echelons of the industry can be attacked. In Arthur’s case, he is wondering how this happened to him and wrote that the hot wallets on mobile phones are not safe enough. If Arthur used a hardware wallet or acold wallet he might not have been protected from the attack. Unlike the hot wallet, the cold one is not always connected to the network.

The features can keep one’s private keys and seed phrase safe from intrusion but Arthur believes that the security breach happened because of a transaction that was made on-chain whcih could also have compromised the seed phrase or the private key from the wallet.

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