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

Hand wearing black glove reaching for a digital 8-bit wallet in a 2x1 glass box

Here are three steps to protect against theft of digital assets like NFTs.Shutterstock; Rachel Mendelson / Insider

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

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

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

One of Nike’s top virtual collection managers has had an estimated $173,000 NFT stolen from his crypto wallet this month.

Experts said recovery of assets is unlikely, but there are simple ways to protect NFTs.

An NFT is essentially a digital collectible. Think of it like a virtual picture or baseball card.

On January 2, Nikhil Gopalani tweeted that he was attacked by an “intelligent” phisher. Gopalani is chief operating officer of RTFKT (pronounced “work”), a buzz digital collectibles company acquired by Nike and a critical part of the sportswear giant’s metaverse strategy.

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

Decrypt, a publication covering web3, estimates stolen NFTs to be worth $173,000.

Gopalani and Nike did not respond to Insider’s requests for comment, but experts said the theft was not an indication of underlying underlying issues with RTFKT, NFTs, or the metaverse.

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

“Anyone can be scammed, no matter how smart you are or how much experience you have in space,” Udotong told Insider. “You have to take extra precautions.”

Udotong and Avivah Litan, a Gartner blockchain analyst, said it’s critical to be proactive as there isn’t much protection for those whose NFTs have been stolen.

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

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

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

Always be on the alert.

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

Banks have to know their customers. NFT collectors should do the same. What do you know about the person on the other side of the transaction? Beware of those who want to trade fast and those who have low volume accounts.

“Usually the volume of scams isn’t that big,” Udotong told Insider.

The advice could have helped Gopalani, who turned out to be the victim of a phishing scam from a familiar phone number and Apple ID.

Do not keep your digital assets in one place.

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

Hardware wallets are another option.

“It’s like a small piggy bank for your crypto,” Udotong said.

Hardware wallets store keys of digital assets offline, making them inaccessible to cyber thieves.

Buy some tools.

Most consumers are familiar with basic antivirus tools like McAfee. There is a growing suite of tools for digital assets as well.

What is the big takeaway?

“Nothing in this world is free,” said Udotong. “Every time you have that burst of enthusiasm, ‘I have to do this now,’ that is the opposite of what you should feel.”

Read the original article on Business Insider

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