Search
Close this search box.

A prominent investor inadvertently gives away NFT collection

A prominent investor inadvertently gives away NFT collection

Kevin Rose, a co-founder of Proof Collective, is the most well-known NFT investor to have fallen for a “social engineering” scam lately. He completed a single transaction on Wednesday that caused the majority of his collection to be sold for free. 

A well-known tech investor is Rose. He co-founded Digg, worked at Google Ventures, and developed apps for fasting and meditation before delving into the world of NFTs. The popular Moonbirds series was created by Proof Collective, which debuted in late 2021 and included Beeple and Gary Vee as members.

Given the nature of NFTs, it is difficult to determine the total loss. Valuation is difficult because of a rarity within a collection, price volatility between sales, and market illiquidity, but Arkham Intelligence estimates the value at $1.09 million (using “the floor price of [the tokens’] relative collections”), and 0xfoobar puts it at about $2 million. 

All the missing tokens came from Rose’s private collection. The assets held by Proof Collective, which are protected by multi-signature accounts, are unaffected. 

Fortunately for Rose, some of his collection’s most expensive tokens weren’t taken. Two crypto punks are among them (one of which most recently sold for $1.8 million), probably because of the collection.

How did Kevin Rose get scammed?

Rose was tricked into authorising a transaction that transferred the NFTs to the attacker’s address and combined them into a single sale for the price of 0 WETH. The bundle was created by manually interacting with OpenSea’s Seaport contracts, which could then be presented to Rose via social engineering.

At the network level, distributed blockchain systems may be very secure, but for many users, the non-human-readable transaction data displayed by most of the wallet software poses a serious security risk. 

It’s not the first time a prominent NFT collector has fallen victim to phishing. It’s not even the first of the month. 

NFT God admitted that, despite describing himself as “highly technical,” he entered his seed phrase “in a way that no longer kept it cold” less than two weeks ago after downloading malware and losing everything. 

It’s likely that more collectors will continue to get rid of their digital art. A multimillion-dollar industry based on trigger-finger FOMO that frequently uses an unreadable interface provides fertile ground for phishing.

 

Share to Social Media

Leave a Comment

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