DeFiance Capital founder Arthur_0x has lost more than $1.5 million in an attack on a hot wallet. He has asked for the address to be blacklisted and is currently investigating how the attack happened.
The wallet was seemingly compromised due to a private key or seed phrase, and Arthur_0x has asked for blacklisting of the address.
Arthur_0x began analyzing the cause of the attack himself, and the attacker was apparently able to access another hardware wallet on his system. As they would have different private keys, this means that the issue would not have been a MetaMask mobile or OS issue, he notes.
He went on to say that he isn’t sure how he “can persuade most normal people to put a substantial part of their net worth on chain anymore” when he himself, as an experienced DeFi user, has been attacked.
The attack highlights the risk of using hot wallets in a time when attacks happen with alarming frequency. Cold wallets offer a much higher level of security, but they are often for more long-term storage of assets. The NFT market has been experiencing a lot of attacks in the past six months, as investors have come flooding in.
Crypto continues to suffer from hacks
The crypto market is no stranger to bad actors exploiting smart contract flaws or executing hacks. Billions have been lost in this manner in the past few years. The DeFi and NFT markets are particularly lucrative targets for attackers, who seize upon the large capital coming in.
In some cases, it’s even affected the wider world. The Twitter hack of multiple prominent figures that saw their accounts post a scam bitcoin link was one of the most high-profile. A similar attack happened to a Democratic candidate challenging Florida Governor Ron DeSantis, with her Twitter account posting a link to an NFT page.
The consequences of such incidents can be far-reaching and deep. Projects will want to ensure that their smart contracts are air-tight, as authorities will likely hold them responsible if investors are affected. Besides auditing smart contracts, crypto insurance projects are also working to protect investors.