OpenSea NFT gifting feature poses threats of NFT fraud

The latest “gift” feature on popular NFT marketplace OpenSea has users confused by “mislabeled” transactions, as this could pose threats of NFT fraud. The new feature could prove to be a potential exploitation tool by NFT fraudsters.

NFTs can now be sent directly to any wallet on OpenSea in just a single transaction. Thus, buyers can purchase an NFT with Ethereum from one wallet and deliver the fungible token to another wallet during the trading process. The feature was meant to save users gas, according to OpenSea.

However, what comes out as a big catch is that some third-party wallet trackers make the gift recipient look like the actual buyer who bought the NFT for themselves. For the uninitiated, third-party wallet trackers are trading apps that track NFT trades by influencers and celebrities. The function can thus be an instrument for carrying out NFT fraud.

Also read: The 10 most common NFT scams and techniques to avoid them

A Twitter post by Metaverse HQ’s pseudonymous founder “JakeandBake” reveals that this feature is already being used by miscreatives. Yes, the feature is allegedly used to make it look like NFT influencers like Gary Vaynerchuk and Pranksy are buying NFTs from multiple pools.

The mischievous act was first brought to light by Twitter accounts – brawlers42 & GrapeDutch619.

Gary came up with one response to this and said that he hopes that this issue is raised so that people are not deceived.

OpenSea has responded to these tweets by saying that the activity feed and API can distinguish between regular purchases and purchases for another wallet in the following ways:

1. ‘Buy for another wallet’ transactions have different ‘receiving’ wallets for the sale and transfer event.
2. ‘Regular’ transactions have the same ‘receiving’ wallet for the sale and the transfer event.

Acknowledging the flagging from the aforementioned twitter handles, OpenSea further tweeted: “We could have done a better job of notifying 3rd party apps and developers as this requires an adjustment to the way they display transaction data. We are doing this work now.”

Also read: MetaMask Announces Upgrade to Prevent NFT Fraud