Tech billionaire Mark Cuban recently lost nearly $900,000 worth of crypto to a scam that could happen to any crypto owner.
On Friday, apparent hackers drained Cuban's digital wallet of around $870,000 worth of various types of cryptocurrencies, including various stablecoins, SuperRare and Ethereum Name Service tokens, according to crypto news outlet DL News.
DL News reports that Cuban recently went on MetaMask, an app that allows users to purchase, store and trade digital tokens, for "the first time in months" to check his account on his phone.
However, Cuban says he believes he downloaded a fraudulent version of the popular app that he found in a Google search, according to DL News. Cuban did not respond to CNBC Make It's requests for confirmation and additional comment.
That's an easy mistake to make. MetaMask is one of the most common crypto wallet managers and there are many fake versions of it that cyber thieves create in order to dupe crypto investors, Kenny Estes, founder and CEO of Diffuse Funds, tells CNBC Make It.
"There are versions of it that are malicious and look like MetaMask, but have a Trojan backdoor built into it. So, if you download that wrong version of MetaMask, they can just take all your funds," he says.
And when it comes to crypto, transactions are irreversible. Once those tokens are gone, they're gone for good. That's one reason financial experts advise against putting more money into crypto than you're willing to potentially lose.
Before the hackers made off with more of Cubans digital funds, he says he was able to transfer his remaining virtual assets to Coinbase, per DL News.
How crypto investors can protect themselves
Although crypto trading can be risky, there are a few measures you can take to protect your digital assets.
One option is to use what's called a "hardware wallet," says Estes. These are physical devices, such as a USB drive, that store the private key you use to access your crypto funds and make transactions. Since your private key is stored on an external device, using a hardware wallet is considered one of the most secure ways to protect access to your crypto.
However, you typically don't store your crypto on the device itself. Additionally, if you lose your hardware wallet and don't have your private key stored somewhere else, you'll lose access to your crypto funds, says Estes.
Another option is to use a custodial wallet. With this option, typically, a third party company has control of your private keys and manages your virtual wallet for you. The company usually assumes responsibility for protecting your digital assets and managing your private key.
Although this option can be more expensive than using a hardware wallet, it can offer users peace of mind. If you lose your account password, the company may be able to help you regain access.
If you're thinking of utilizing this option, you'll want to make sure you're using a custodial wallet that is regulated by your country's government and that you've reviewed the company's insurance policy to see how much of your assets will be protected in the event of a cyber attack or if the company goes bankrupt, says Estes.
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