The market may be down, but scammers are still out in force. Despite cryptocurrency prices crashing in May and June causing NFT sales volumes to plummet, July saw the highest number of NFTs reported stolen ever.
This year alone, more than $100 million worth of NFTs have been stolen. These staggering numbers come to us from blockchain research firm Elliptic.
Stolen NFTs on the rise – Photo by Mikhail Nilov
How do fraudsters access your NFTs?
A common way that NFTs are stolen is through compromised security via social media. This can look like arranging an NFT trade with someone you think is trustworthy, only to find out they are a scammer and had no intention of sending you an NFT in return. Another form of social media that regularly sees scammers is Discord. From fake phishing links to project Discords being compromised and even scammers in your DMs, it’s so important to always be on guard. 23% of NFT thefts this year have come from social media security compromises, so it pays to be cautious.
Of course, social media isn’t the only way you can get your NFTs stolen. So many of us have come across fake mint links, with scammers posting phishing links disguised as official “stealth drops”. Another route to NFT theft is through ‘Free Mints’. Many of us have lighter wallets right now, which is why free coins have become popular. However, if you are not careful, you may be giving authorization to sign your NFTs to fraudsters.
How much do fraudsters make from stolen NFTs?
Elliptic says NFT thieves receive an average of $300,000 per scam. This figure is likely to be much higher, as not all thefts are publicly reported. In order for them to get away with the loot, the money is usually laundered. It is said that the amount of money laundering in NFT-based platforms is 8 million dollars. However, nearly $329 million in funds in the NFT market have come from “cryptocurrency mixers”. These mixers are used to launder the funds made by NFT scams and they hide the origin of the funds. Be aware – while some scams may be the work of a lone wolf, there are bigger fish at play. Citing a theft of $540 million in April linked to North Korea LazarusGroupElliptic said:
“There is a growing threat to NFT-based services from sanctioned entities and state-sponsored exploits.”
Scammers profit from the misfortune of others – Photo by RODNAE Productions
With such huge numbers coming in around the theft of NFTs and the increasing number of frauds it is more important than ever to be safe and protect your assets. Check out our guide where we chat with Ledger about NFT security and fraud protection.
All investment/financial opinions expressed by NFTevening.com are not recommendations.
This article is educational material.
As always, do your own research before making any kind of investment.
