Proof NFTs are Safe - Exec Speaks After CEO's Account Is Hacked

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The CEO of NFT business Proof, Kevin Rose, who created the renowned collection Moonbirds, disclosed that his account had been stolen. According to reports, stolen NFTs are valued at millions of dollars. Rose forbade his 1.6 million Twitter followers from purchasing any Chromie Squiggles, an NFT project for generative art launched by Snowfro, the maker of Art Blocks. 25 squiggles and “a few more NFTs,” including one that was an auto glyph, according to Rose, were lost.

A total of 40 NFTs, consisting of about 25 Chromie Squiggles as well as an Autoglyphs NFT by initial CryptoPunks producer Larva Labs, were taken off his Ethereum (ETH) account on January 25, according to Etherscan’s tracking of Rose’s transactions. Rose formally acknowledged the occasion in a tweet not long after speculations started to circulate on Twitter.

I was just hacked, stay tuned for details – please avoid buying any squiggles until we get them flagged (just lost 25) + a few other NFTs (an autoglyph) …

— Kevin Rose (@kevinrose) January 25, 2023

At the time of publication, Chromie Squiggles’ floor price was 13.3 ETH, or around $20,715; 25 of them were lost in the attack on Rose. On OpenSea, an Autoglyph charges 315 ETH, or around $490,000.

The hacker took NFTs valued at at least $1 million according to the current floor cost, or the cheapest-listed NFT, off the most popular collections. The value of some of the specific NFTs, however, may be much larger.

A Purported Phishing Attempt

Rose seems to have begun moving some of his most valued NFTs, such as CryptoPunks as well as works by pseudonymous designer XCOPY, away from the krovault.eth account and into a different wallet not long after the attack stopped, according to public wallet information made available through the OpenSea marketplace.

The stolen assets were subsequently flagged by OpenSea, making them unsuitable for purchase on that marketplace at this time. This does not stop NFTs from being transferred or from being sold on another platform.

Rose was tricked into providing a fraudulent signature in a series of tweets by Proof Vice Chairman of Engineering Arran Schlosberg, allowing the hacker to withdraw the tokens from the wallet. Schlosberg claims that the team attempted to use Revoke Cash to undo the operations, although it was too late because Rose’s wallet had already started to send NFTs.

However, according to Schlosberg, Proof assets were unaffected because subsequent transfers call for additional signatures.

An Increase in NFT Fraud

The wallet that scammed Rose out of their NFTs also seems to have looted 75 ETH (equal to around $121,000 worth) from some other victim, according to ZachXBT, a pseudonymous ledger investigator.

The investigation further asserts that the perpetrator converted the stolen ETH to Bitcoin before using a coin mixer to muddle the money flow.

Even seasoned Web3 makers and NFT collectors occasionally succumb to attacks that usually target less experienced traders, giving the crypto market a Wild West air. On Wednesday afternoon, the same thing occurred when Kevin Rose, a co-founder of the Moonbirds developer Proof, claimed that his Ethereum account had been “hacked” and that precious assets had been taken.

A total of 40 NFTs, including roughly 25 Chromie Squiggles from the Art Blocks project and a priceless Autoglyphs NFT by initial CryptoPunks developer Larva Labs, were reportedly stolen from their krovault.eth wallet early on Wednesday afternoon. Soon after rumours started to spread on Twitter, Rose formally confirmed the event in a tweet.

According to public wallet data shared via the OpenSea marketplace, Rose appears to have started moving some of his most expensive NFTs, such as CryptoPunks and works by pseudonymous artist XCOPY, from the krovault.eth account and into another wallet shortly after the attack ended.

Since OpenSea identified the stolen assets, they are presently unavailable for sale on that specific marketplace. That doesn’t, however, prevent you from trying to sell the NFTs on another platform or transfer them.

From an NFT Drop to a Growing Web3 Business with a CC0 Twist, according to Kevin Rose

According to the current floor cost among the most well-known collections, the hacker stole NFTs valued at at least $1,000,000; however, some of the specific NFTs may have a significantly greater value.

For instance, the floor price for Chromie Squiggles is now 13.3 ETH or around $20,715 per unit. Rose lost 25 of them in the attack. At the time of writing, an Autoglyph would cost 315 ETH at OpenSea, or around $491,000.

Rose’s Krovault.eth wallet—likely a “cold” or physical wallet—is intended to be his repository for installing security on his high-value valuables, as the name suggests. On the OpenSea website, it is listed as such and says, “Locked down wallet.” It’s possible that Rose exposed the wallet to an attack by connecting it to OpenSea.

Proof VP from Engineering Arran Schlosberg stated that Rose got “phished into signing a fraudulent signature that let the hacker move a huge amount of high-value tokens” in a postmortem thread that was posted this afternoon.

1/ This was a classic piece of social engineering, tricking KRO into a false sense of security. The technical aspect of the hack was limited to crafting signatures accepted by OpenSea's marketplace contract.

— Arran (@divergencearran) January 25, 2023

He stated, “This was a typical example of social engineering, fooling [Rose] into thinking she was safe.” The hack’s technical components were restricted to creating signatures that were recognized by the marketplace contract with OpenSea.

We Must Spot a Phishing Scam Before It’s Too Late

“Proof’s assets were untouched,” Schlosberg said, adding that Rose and her team are working with anti-fraud specialists from OpenSea and hardware wallet manufacturer Ledger and “exploring all possibilities, including legal.” Rose and colleagues are also “considering all possibilities, including legal.”

Rose was contacted by Decrypt shortly after the incident, but no response was received.

The same wallet that earlier on Wednesday tricked Rose out of his NFTs also seems to have taken 75 ETH (worth about $121,000) from another victim, according to a tweet from blockchain investigator ZachXBT. To conceal the cash flow, they claimed that the attacker converted the hijacked ETH into bitcoin and then sent it through a coin mixer service.

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