August 29, 2022
By Anjali Kochhar
Over $100 million worth of non-fungible tokens (NFTs) were stolen in the year to July, according to blockchain research firm Elliptic.
NFTs are blockchain-based assets with a unique identification number that represents digital files such as images, videos or text.
The NFT market surged in 2021 as crypto-rich speculators spent billions of dollars on the assets, hoping to profit as prices rose. But with the dip in crypto prices, NFT prices and sale volumes also plunged.
NFT scams have also increased immensely in the past couple of months.
The report shared with Reuters said that security compromises via social media have also surged, accounting for 23% of NFT thefts in 2022.
As per the report, thieves received an average of $300,000 per scam. The true scale of NFT thefts is likely to be even higher, given that not all crimes are publicly reported, it added.
It’s been long that hacks and scams have plagued the crypto industry hence provoking regulators around the world to issue concerns about the use of crypto assets in cybercrime.
Elliptic put the amount of money-laundering in NFT-based platforms at just $8 million. But almost $329 million worth of funds in the NFT market came from services such as so-called cryptocurrency mixers, which are designed to hide the funds’ origin, Elliptic said.
One such mixer, Tornado Cash, was used for laundering just over half of the proceeds of NFT scams, the report said, before it was sanctioned by the United States this month.
“There is a growing threat to NFT-based services from sanctioned entities and state-sponsored exploits,” Elliptic said, citing a $540 million theft in April that U.S. officials have linked to North Korea’s Lazarus Group.
About the author
Anjali Kochhar covers cryptocurrency stories in India as well as globally. Having been in the field of media and journalism for over three years now, she has developed a sharp news sense and works hard to present information that goes beyond the obvious. She is an avid reader and loves writing on a wide range of subjects.