NFT thefts hit $100 million in ’22; Facebook adds tokens
More than $100 million worth of non-fungible tokens (NFTs) were stolen in the 12 months ending in July, blockchain research firm Elliptic reported on August 24. It worked out to an average of $300,000 per theft.
The report, “NFTs and Financial Crime: Money Laundering, Market Manipulation, Scams & Sanctions Evasion Through Non-Fungible Tokens,” noted that “actual numbers are likely to be higher, as thefts are not always publicly reported.”
The worst month was this July, when 4,600 were stolen, the report says.
See also: Report: Record number of NFTs stolen in July
The report also found that $8 million has been laundered through NFTs since 2017. Beyond that, the blockchain data firm said “there is a growing threat to NFT-based services from sanctioned entities and state-backed exploits.”
The most high-profile of these thefts was from actor Seth Green, who uses his Bored Ape Yacht Club avatar as the star of an otherwise live-action TV show he produces. He is said to have bought it back for more than he paid the first time.
Read more: Seth Green’s Kidnapped Bored Ape shows NFT’s growing commercialization
Meta adds Facebook NFTs
Social media conglomerate Meta has added the ability to display NFTs on Facebook, expanding the capability from its Instagram platform on August 29. Users will be able to cross-post their NFTs, connecting them to both sites simultaneously by connecting to a digital wallet containing the token.
Related: Meta extends NFT sharing feature from Instagram to Facebook
NFT capability was added to Instagram in May, expanding to 100 countries worldwide on August 4.
While Twitter moved ahead of Instagram and Facebook in allowing users to link NFTs to their profiles, it mainly focused on profile pictures, which received a special border indicating a linked NFT instead of a cut-and-pasted photo.
We are introducing the ability to cross-post digital collectibles @facebook and @instagram. You can now connect your digital wallet to both apps to share yours #NFTs on both.
Which NFT are you happy to share? 👀 pic.twitter.com/SlpwAuY02c
— Meta Newsroom (@MetaNewsroom) 29 August 2022
The expansion to Facebook and Instagram could help the NFT industry grow significantly, as it gives a huge reason to own them to a much larger group of people – 2.3 billion Facebook users is a significant increase, although you need a separate digital wallet at this point.
“Creators are using new technologies like NFTs to take more control over their work, their relationship with their fans and how they can monetize,” Meta said in a press release in May. “At Meta, we’re looking at what creators are already doing across our technologies to improve their experience, help them create more monetization opportunities, and bring NFTs to a wider audience.”
NFT royalties easily dethroned
The ability to add royalty payments to any resale of an NFT can be a huge boon to artists, musicians and others. But while the idea has the potential to reboot the creative economy—it has been quickly embraced by musicians, whose incomes have been reduced by the use of streaming music sites—it has a major hole.
The addition of royalties cannot be enforced, as NFT’s own smart contract cannot tell who it has been sold to – or for how much. Instead, the process relies on NFT marketplaces to honor, collect and enforce the royalty requests. While most of the big sites do, several decentralized finance (DeFi) have emerged that specifically cater to owners who want to bypass royalties.
See also: NFT Royalty Payments: Potentially game-changing, easy to handle
Digital artist and royalty collector Mike “Beeple” Winkelmann – best known for the $69 million NFT sale that brought NFTs to the wider public’s attention last year – took to Twitter to point out: “We can’t ‘smart contract’ us around this. If I have an NFT and I decide to ‘gift’ it to someone, and then they ‘gift’ me 10ETH afterwards, we’ve got around the royalties. If someone can explain to me how a smart contract will EVER stop, I’m all ears…”
The solution, he said, is that “creators need to build a collector base that WILL honor those royalties…. It’s really that simple.”
And it’s complex, as musicians learned decades ago when Napster turned mass piracy into a home hobby activity.
Going, going…
In other news, top auctioneer Sotheby’s has employee an NFT specialist for its digital art team, The Block reported. Brian Beccafico, who goes by @Arthemort, joins the renowned house as it expands an NFT market presence that began with the $17 million sale of an NFT titled “The Fungible” by digital artist Pak.
In October 2021, it launched Sotheby’s Metaverse, an NFT sales platform that is not actually in an actual metaverse.
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