Nike executive says phisher stole his NFT. Here are 3 things everyone should do to protect their digital wallet

Black gloved hand reaching for digital 8 bit wallet in 2x1 glass box

Here are three steps to protect against theft of digital assets such as NFT.Shutterstock; Rachel Mendelson/Insider

  • NFT theft reached $100 million in the year ending July 2022.

  • This month, a Nike executive’s crypto wallet was ransacked after an alleged phishing attack.

  • Experts say people can take a few simple steps to prevent theft.

One of Nike’s top virtual collectibles executives had an estimated $173,000 NFT stolen from a crypto wallet this month.

Experts said the assets were unlikely to be recovered, but said there were simple ways to protect NFTs.

NFT is essentially a digital collectible. Think of it as a virtual painting or baseball card.

On January 2, Nikhil Gopalani tweeted that he had been hacked by a “smart” phisher. Gopalani is the COO of RTFKT (pronounced “artifact”), a vibrant digital collectibles company acquired by Nike and a key part of the sportswear giant’s metaverse strategy.

In a tweet, Gopalani said that phishers had stolen his Clonex NFT and several other digital collectibles, including some “Cryptokicks”. Clonex NFT is a collaboration between RTFKT and Nike. Cryptokicks are Nike’s first virtual sneakers.

Decrypt, a web3 publication, estimated the stolen NFTs were worth $173,000.

Gopalani and Nike did not respond to Insiders’ requests for comment, but experts said the theft is not indicative of underlying issues with RTFKT, NFT, or the Metaverse.

“It happens to everyone,” said Emmanuel Udotong, a former analyst and CEO of McKinsey and co-founder of Shield, which provides security for web3, a version of the internet that uses blockchain, the distributed ledger that underpins NFT.

“The takeaway should be that anyone can be fooled, no matter how smart you are or how much space experience you have,” Udotong told Insider. “You need to take extra precautions.”

Udotong and Avivah Litan, a Gartner Blockchain analyst, said it’s very important to be proactive as there aren’t many safeguards for people whose NFTs have been stolen.

“It’s very early days for blockchain fraud protection,” Litan told Insider. “You can see where stolen goods go. That doesn’t mean you can get them back.”

Blockchain research firm Elliptic last year estimated that $100 million worth of NFTs were stolen in the year ending July 2022, with the average fraud resulting in a loss of $300,000.

Here are three simple steps that Litan and Udotong said consumers can take to prevent NFT theft.

Always be ready.

“The only thing the average user can do is be completely diligent at all times,” said Litan. “Always be careful. Always be suspicious.”

Banks have a duty to know their customers. NFT collectors should do the same. What do you know about the person on the other side of the transaction? Watch out for people who want to trade quickly and people who have low volume accounts.

“Usually scams don’t do that much,” Udotong told Insider.

This advice may have helped Gopalani, who is believed to have fallen victim to a phishing scam originating from a familiar phone number and Apple ID.

Don’t keep your digital assets in one place.

Financial advisors talk about diversification. The same advice applies to digital assets. Try splitting them between several crypto wallets. If one gets hacked, the others should be safe.

Hardware wallets are another option.

“It’s like a little piggy bank for your cryptocurrency,” said Udotong.

Hardware wallets store the keys to digital assets offline, making them inaccessible to cybercriminals.

Buy some tools.

Most consumers are familiar with basic antivirus tools like McAfee. There is also a growing set of digital asset tools available.

How big is a takeaway?

“Nothing is free in this world,” said Udotong. “Every time you get a euphoria spike, it’s, ‘I have to do this now,’ that’s the exact opposite of what you’re supposed to feel.”

Read the original article in Business Insider

Leave a Reply

Your email address will not be published. Required fields are marked *