NFTs worth US$1.7 million have been stolen from DeFiance Capital founder

NFTs worth US$1.7 million have been stolen from DeFiance Capital founder

Arthur Cheng, who is founder of a venture Capital fund known as defiance capital, has lost over 1.7 million worth of non-fungible tokens NFTs as these were stolen from his crypto wallet on Tuesday.

At the time of writing, several stolen NFTs have already been sold using marketplaces like OpenSea.

“Well, this hit me hard but if I got exploited as a fairly sophisticated 5 years crypto user (DeFi user, password manager, mostly hardware wallet), I’m not sure how I can persuade most normal people to put a substantial part of their net worth on chain anymore,” Cheong wrote in a tweet that has since been deleted.

Cheong’s wallet was targeted because it was connected to the Internet. Such wallets are termed as “hot wallets”. Those wallets which are kept off-line are “cold wallets” and these are supposed to be far safer.

ATTENTION ALL @AzukiZen it seems sadly @Arthur_0x wallet has been hacked please do not bid or buy any of these NFTs from this address!!! pic.twitter.com/SsdKt8otis

— StockEd (@robbyhammz) March 22, 2022

It was estimated by security firm PeckShield that each stolen NFT belonged to an expensive collection which included five CloneX, 17 Azuki, two Tsubasa, two Hedgies, and 33 Second Self NFTs.

#PeckShieldAlert @Arthur_0x ’s hot wallet appears to be compromised. ~59 #NFTs was transferred to https://t.co/MZXIWN4ING , including ~5 #CloneX, ~17 $Azuki @AzukiZen, ~2 @TabinekoKIKI, ~2 @HedgiesOfficial, ~33 @SecondSelfNFT
~19 stolen NFTs wiped for ~233 $ETH (~$690k). pic.twitter.com/oqM08ex1Yg

— PeckShieldAlert (@PeckShieldAlert) March 22, 2022

Cheong explained on Twitter that he clicked an email received from one of the portfolio’s firm of DeFiance capital only to find out that it was a phishing email. Hacker was able to steal the password and got access to his crypto wallet.

“Was being careless on this one since it comes from 2 seemingly legitimate sources,” Cheong tweeted.

Found out the likely root cause for the exploit, it's a targeted social engineering attack. Received a spear-phishing email that really seems to be sent by one of our portco with content that seems like general industry-relevant content.

They are likely targeting all crypto peep pic.twitter.com/SegYBcoLX2

— Arthur (@Arthur_0x) March 22, 2022

DeFiance capital is an investor in Web3 gaming and DeFi platforms, and it facilitates users to earn interest in trading in famous gaming platform Axie Infinity; and Ethereum software company ConsenSys.

This type of hack is not uncommon, but Cheong tweeted that he “didn’t expect this to happen to me.”