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Over $100M Stolen in NFTs, Here’s How You can Keep Your NFT Safe

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VOC, Voice of Crypto, NFT Scams

According to Elliptic’s report, scammers have stolen non-fungible tokens (NFT) worth $100 million in the past year. Elliptic is a blockchain analysis company that released an NFTs and Financial Crime report for July 2021 to July 2022.

The report mentioned that apart from NFT stealing activities, since 2017, approximately $8 million in illegal funds have been laundered via NFTs. NFTs or non-fungible tokens are cryptographically unique assets linked to a particular digital or physical asset and provide proof of ownership.

NFT Scams on Rise

The crypto market witnessed a surge in 2021, with the crypto-rich speculators spending billions of dollars on digital assets, expecting profit with rising prices. However, with the bear market of May and June this year, the price for NFTs and their sales volumes have substantially declined.

Despite this market plunge, the scams related to NFTs remain high, with July witnessing the highest number of NFTs reported being stolen on record. The report states that cybercriminals have managed to net an average of $300,000 per scam. They stole around $24 million in NFTs in May this year. As of July, the data peaks with the scammers stealing NFTs at 4,600. 

Elliptic stated that this year, the scammers stole 23% of NFTs through phishing messages via social channels like Discord. Other strategies that these scammers to attack users include phishing emails and malicious websites. The Solana hack of early August is an example of such scam methods.

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NFT related discord servers

source: Elliptic: NFT and Financial Crime report

CryptoPunk #4324

The most valuable non-fungible asset that the scammers managed to lay their hands on was CryptoPunk #4324. In November 2021, it brought $490,000 to the pockets of these thieves. Since then, the OpenSea platform has kept the collectible as ‘reported for suspicious activity”.

As per the report, the theft of December 2021 was the most significant. It resulted in a loss of 16 blue chip NFTs worth $2.1 million. Elliptic mentions that the bulk of NFTs that the users lost to scams include Bored Apes, Mutant Apes, Azuki, Otherside, and CloneX.

Source: Elliptic

It’s quite evident that the NFT project that the cybercriminals highly prefer is none other than BAYC.  ‘Family Guy’ star Seth Green paid a ransom of 165 Ether to recover his stolen Bored Ape NFTs worth more than $300,000. 

Citing a $540 million theft in April, which the U.S. officials claim to have links with North Korea’s Lazarus Group, Elliptic said, “There is a growing threat to NFT-based services from sanctioned entities and state-sponsored exploits”. 

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The report talks about the Tornando Cash mixing service and states that NFTs were purchased with digital assets worth more than $160,000 that came via sanctioned entities. For a long period, these hacks and scams have plagued the sector of the crypto world.

These bad actors have become increasingly sophisticated with time and have managed to bypass verification protocols. This has increased concerns amongst crypto regulators and enthusiasts regarding using crypto assets in cyber crimes.

Samvida is a versatile writer/editor passionate about reaching out to people of different precincts by using words as an effective means. She’s a law graduate residing in Bihar, India. She holds a curious persona, often delving into worlds of astrophysics, technology, crypto, law, and international relations.

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