The market may be down, but scammers are still out in full 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, NFTs worth more than $100 million worth of NFTs have been stolen. These staggering figures come to us from blockchain research firm Elliptic.
Stolen NFTs are on the rise – Photo by Mikhail Nilov
How do scammers access your NFTs?
One common way that NFTs become stolen is through compromised security via social media. This could look like organising an NFT trade with someone you think is trustworthy, only to find out that 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 becoming compromised and even scammers in your DMs, it’s so important to always be wary. 23% of NFT thefts this year have come from social media security compromises, so it pays to be cautious.
Of course, social media is not the only way you could have 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’. A lot of us have lighter wallets right now, and so free mints have gained in popularity. But if you are not careful, you may be setting approval to sign your NFTs over to scammers.
How much do scammers make from stolen NFTs?
Elliptic says that NFT thieves receive, on average, $300,000 per scam. This number is likely to be much higher, as not all thefts are publicly reported. So that they can get away with their loot, the money is usually laundered. It is said that the amount of money-laundering in NFT-based platforms sits at $8 million. However, almost $329 million worth of funds in the NFT market has come from ‘cryptocurrency mixers’. These mixers are used for laundering the funds made from 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 $540 million theft in April linked to North Korea’s Lazarus Group, Elliptic said:
“There is a growing threat to NFT-based services from sanctioned entities and state-sponsored exploits.”
Scammers are cashing in on the misfortune of others – Photo by RODNAE Productions
With such huge figures coming in surrounding the theft of NFTs and the growing number of scams it is more important than ever to stay safe and protect your assets. Check out our guide where we chat to Ledger about NFT security and protecting yourself from scams.
All investment/financial opinions expressed by NFTevening.com are not recommendations.
This article is educational material.
As always, make your own research prior to making any kind of investment.