It has been a busy first quarter for the cryptocurrency market and the NFT space. A surge in NFT trading volumes has prompted more mainstream players to enter the digital space and the Metaverse.
While interest has risen, illicit activity has also been on the rise. Concerns about Russia's circumvention of sanctions have forced an increase in government control over digital assets.
Arthur Cheong becomes the latest victim of Hot Wallet Hack
This morning, the news hit the threads of another hot wallet hack, putting NFTs back in the spotlight. Arthur Cheong (“Arthur Ox”), the founder of DeFiance Capital, announced that he was the victim of a Twitter hack.
Ox tweeted: "I'm not sure how I can get most ordinary people to still put a substantial portion of their net worth onchain."
Defiance Capital founder has requested that his address be blacklisted. According to today's report, some of Azuki's NFTs have been sold on the OpenSea market.
The community responded to Cheong's tweet, tweeting a warning against bidding or buying NFTs from the hacked address.
Illicit activity continues despite increased government control
Il NFT market has seen a marked increase in illicit activity. In December, a famous gallery owner, Todd Kramer, had a collection of NFTs stolen from his hot wallet. Valued at $ 2,2 million, OpenSea froze the stolen assets. The collection consisted of 16 NFTs of Bored Ape and Mutant Ape.
Both Todd Kramer and Arthur Cheong were hacked due to storing NFT collections in hot wallets. Hot wallets connect to the internet. Conversely, cold wallets are not connected to the internet and protect digital assets from cybercriminals.
For OpenSea, it was another unwanted news. In January, OpenSea reimbursed 750 ETH to users who succumbed to NFT exploits. Illicit activity has increased at such a pace that NFTs have become a matter of concern for regulators and governments.
Earlier this month, the Chinese government targeted NFTs and the Metaverse to curb illegal fundraising. British Government Members of Parliament (MPs) called for stricter regulations on cryptocurrencies and NFTs earlier this year. The latest hack also coincides with the warning from governments that Russia is using digital assets to circumvent sanctions.