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Arthur Cheong, Founder of DeFiance Capital, Loses More Than $1.6M in a Hot Wallet Hack

DeFiance Capital founder lost all the crypto and NFTs in one of his hot wallets.

It’s suspected that the attack was caused by a phishing mail.

Quick take:

  • The crypto community is supporting Arthur to help retrieve the lost assets.
  • However, the hackers have already sold some of the stolen NFTs on OpenSea.

The founder of DeFiance Capital, Arthur Cheong, is the recent victim of a hot wallet attack. The hack resulted in a loss of over $1.6 million in crypto and NFTs.

The crypto community has shown massive support, assisting Arthur in retrieving his assets. The hacker’s wallet was also requested to be blacklisted.

An NFT community member named “Cirrus” decided to help Arthur out. He purchased two of the stolen Azuki NFTs and agreed to sell them to Arthur at cost.

Arthur has suffered a substantial loss

The stolen assets from Arthur’s wallet include…

  • 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 the hacker’s address was posted to be blacklisted, the hacker managed to transfer the Azuki's to another address and then batch swapped to cash out. 

This shows that the hacker was very familiar with the entire NFT platform and could target other collectors.

Hot or cold - Are the assets safe?

In contrast to cold wallets, hot wallets are prone to frequent and easier exploits. This is because hot wallets are connected to the internet.

He tweeted that the hacker could also access another hot wallet connected to his PC, with different private keys and seed phrases.

After proper investigation, Arthur identified the root cause of the hack. 

He identified that it was a targeted social engineering attack. It all happened from a phishing email that he received that seemed like industry-relevant content.

He said, "Have strong evidence to believe this is the same group of hackers that exploited BZX, Hugh, MGNR, and myself - The infamous Lazarus group.”

Scams and exploits seem to rise as more people jump on the crypto bandwagon. Hackers seem to exploit and take control of every tiny loophole. People have to be extra careful with websites where they connect their wallets and phishing emails, claiming to be general client mails.

The information provided on DecentReviews does not constitute investment advice, financial advice, trading advice, or any other sort of advice. Do not treat any of the websites content as such. DecentReviews does not recommend that any cryptocurrency or blockchain asset should be bought, sold, or held by you. Conduct your own due diligence and consult your financial advisor before making any investment decisions.

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