Bitcoin Hot Wallets Under Attack by Hackers

Publish on 27 March 2024

The founder of the Ordinal Rugs project disclosed that hackers targeted members of the Bitcoin Rock Discord server, resulting in the theft of significant amounts of Bitcoin (BTC) and Ordinal inscriptions from their wallet. The stolen funds amounted to $1.47 BTC (approximately $103,003) and 4 BTC (approximately $208,196) worth of Ordinal inscriptions.

Ordinal inscriptions have gained popularity in the digital collectibles space, with millions of inscriptions being minted on the Bitcoin blockchain, totaling millions in transaction fees. This popularity has made Bitcoin wallets a lucrative target for hackers.

The founder, known as Archon, admitted to being careless despite implementing strong security controls, which included Yubikeys for personal logins and storing assets in secure hardware and multi-sig wallets.

Cyber attacks targeting crypto wallets are common, with high-profile individuals often being targets. The hack on the Bitcoin Rock Discord server involved a phishing attack disguised as a giveaway of Runestones Ordinals. When Archon connected his wallet to the malicious website, the thief was able to steal the NFTs.

The stolen inscriptions were subsequently used by the hackers to pay transaction fees. While Archon's personal wallet was affected, no funds related to the Ordinal Rugs project were compromised.

Phishing attacks like this exploit social engineering to deceive users into revealing sensitive information. Blockchain security firm Halborn emphasized the importance of due diligence and vigilance in protecting against such attacks, including verifying website URLs and using browser extensions to block malicious domains.

The incident underscores the need for heightened security measures in the crypto space, especially as the popularity of digital collectibles continues to grow. Established wallets like MetaMask have integrated security features to mitigate risks, but newer wallets may lack these protections.

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