In the fast-paced realm of Web3 and the cryptocurrencies that serve as its financial lifeblood, security missteps can be very costly, even if you’re a billionaire crypto founder or titan of industry, as two recent crypto security shockers showed.
Just days after Ethereum lead Vitalik Buterin’s X account was compromised, wreaking havoc worth nearly $700,000, well-known billionaire Shark Tank host and crypto bull Mark Cuban had his MetaMask wallet phished for over $800k.
The incidents raised concerns about the safety of Web3: How can normal users stay safe when even its most high-profile advocates couldn’t?
In response, CoolWallet CEO Michael Ou explained on Linkedin how Web3 retail users could safeguard their crypto assets by implementing real-time blockchain analytics tools like CoolWallet’s Smart Scan feature.
In this article, we’ll cover the furor around Buterin and Cuban’s hacks, with our CEO’s added insights.
Vitalik Buterin’s Twitter (X) Hack: Could 2FA Have Avoided It?
On 10 September 2023, Ethereum creator Vitalik Buterin became the target of a Twitter hack that led to the theft of $691,000 from users who clicked on a malicious link posted on his feed. The hacker exploited the platform to announce the launch of a set of Merge NFTs from software provider Consensys, the firm behind MetaMask and the new layer-2 chain Linea. The link, which was visible to Buterin’s nearly 5 million followers, tricked users into connecting their wallets to mint the NFT.
In reality, it was a phishing trap that enabled the hacker to steal $ funds from the connected wallets. Within an hour of the hack, the thief had already made off with more than $147,000, a figure that later surged to $691,000, according to blockchain investigator @ZachXBT. Buterin didn’t comment publicly.
Binance CEO Changpeng “CZ” Zhao criticized Twitter and other social media platforms’ account security and lack of two-factor authentication (2FA) for all users, which is only available for those who pay for Twitter Blue.
CoolWallet users will of course know that our hardware wallet series comes with its own unique “2+1” authentication, which requires your phone’s biometric verification, our CoolWallet App’s password protection, and of course, physical verification of any transaction or authorization request by pushing a button on either our beginner model CoolWallet S or flagship CoolWallet Pro.
Learn about 10 hardware wallet security measures that protect you in Web3
Mark Cuban’s Crypto Wallet Hack
After apparently accessing his MetaMask wallet for the first time in 160 days, billionaire entrepreneur Mark Cuban swiftly got hacked for $870,000. Cuban later confirmed that the hack occurred after he downloaded a malware-infected version of MetaMask.
“I’m pretty sure I downloaded a version of MetaMask with some shit in it,” Cuban told DL News, because he Googled Circle, not MetaMask, for some reason. when he went to his account to clean it up on his phone.
Bad actors try to trick users by getting them to first download fake MetaMask extensions and then unwittingly expose their private keys or recovery seed, which is finally used by the criminals to drain the victim’s wallet.
The Dallas Mavericks owner fortunately responded quickly and managed to save the rest of his assets ($2.5 million in USDC) by transferring them to Coinbase.
The incident showed no one is safe from hackers and scammers. Binance’s CZ again added his two satoshis, emphasizing that even experienced users are vulnerable to such attacks and he shared some methods for securing private keys and ensuring their safe transfer to successors.
CoolWallet CEO Michael Ou Responds To Buterin and Cuban’s Hacks
Michael Ou, founder and CEO of CoolBitX, the maker of CoolWallet’s leading hardware wallet series first launched in 2016, broke down how CoolWallet’s powerful Web3 feature SmartScan, which was developed with Japan-based blockchain security firm KEKKAI, could have saved Cuban’s assets.
1. Enhanced Security of Hardware Wallets:
Michael: The fundamental difference between “hot” (online) browser-based wallets like MetaMask and “cold” (offline) hardware wallets like CoolWallet is the level of security that your assets enjoy. While browser wallets are convenient and free to use, that freedom can come with a hefty price tag that could leave you with nothing. They’re prone to phishing attacks and malicious software downloads (over $650 million in crypto assets were stolen in the first half of 2023) because your security is only as good as your phone or laptop’s safety measures.
Conversely, hardware wallets are dedicated devices that are designed to keep private keys completely offline, preferably locked deep inside an impenetrable secure element (SE), which eliminates the risk of them being exposed to online threats.
2. CoolWallet SmartScan – A Proactive Defender
Web3 users face a plethora of dangers on a daily basis. CoolWallet’s SmartScan feature is not just a passive protector; it actively scans and warns users of potential security threats. Had Cuban used CoolWallet, the moment he attempted to interact with a fraudulent version of MetaMask, SmartScan would have likely flagged this suspicious behavior, providing a timely alert to help you self-custody safely, as can be seen with some sample screenshots from CoolWallet App below.
3. Crypto Literacy and User-Friendly Design:
CoolWallet emphasizes the importance of crypto literacy. While Cuban mentioned that 99% of what he does in crypto is for learning, it’s vital to ensure that even as one learns, they’re shielded from potential pitfalls.
CoolWallet’s intuitive design and informative prompts aim to guide users like Cuban, no matter their age, crypto knowledge, or net worth, to safely navigate the crypto waters. We do this by teaching you security best practice tips in accordance with the Proof Of Keys philosophy.
4. Transparency Should Come With Added Caution
Though Cuban appreciates the transparency of blockchains, stating he doesn’t mind if people know his digital asset holdings, transparency without security can be perilous. With CoolWallet, users benefit from both the transparent nature of blockchain transactions and the added security layer to ensure those transactions are safe. For example, the CoolWallet Pro’s EAL6+ secure element chip code is open-source, meaning that users can double-check with third-party reports that there are no hidden backdoors that could compromise users’s data privacy and asset security.
5. Avoiding the Traps of Fake Applications:
One major downfall for Cuban was downloading a counterfeit version of MetaMask. CoolWallet provides users with the assurance that they are interacting with genuine, verified applications. Its embedded security measures significantly reduce the risk of interfacing with malicious software.
Conclusion: The Broader Implications for the Crypto Industry
In conclusion, while the crypto world offers immense opportunities, it also brings along its set of challenges. Security missteps can be brutally unforgiving, and the best defense is a combination of awareness, education, and the use of advanced tools that offer current protection against ever-evolving crypto threats.
Mark Cuban is not just an individual investor but a prominent figure in the crypto space, backing several projects and advocating for pro-crypto legislation. His experience serves as a cautionary tale for both new and seasoned investors and underscores the need for robust security protocols and ongoing education to protect one’s assets in this high-stakes environment, where one mistake could cost you everything.
With the frontline defense of next-generation DeFi tools like CoolWallet’s SmartScan, users can navigate the crypto space with increased confidence, ensuring their assets remain protected against potential threats.