Although there are many NFTs that are readily sold despite being reported as stolen, NFT markets like OpenSea are frequently pressured to take action against stolen or counterfeit NFTs. There are high-value NFTs worth millions of dollars that are reported as stolen and are subsequently blocked from OpenSea’s platform, even though some of them weren’t truly stolen. The total quantity of stolen NFTs is unclear. Although it can happen to any NFT on the blockchain, this is a problem that mostly affects high-value NFTs from well-known collections. OpenSea hasn’t yet developed the ability to distinguish between a real theft and a vicious trader exploiting the system.
Blockchain non-fungible tokens (NFTs) can be listed, put up for auction, and purchased from other users on OpenSea, a Web3 marketplace built on Ethereum. The American corporation OpenSea has developed a contentious reputation in the Web3 community for exercising centralized control over its platform. OpenSea is wholly owned and run by a centralized staff, in contrast to its community-owned, decentralized rivals Rarible and LooksRare, and as a result, it experiences the same issues dealing with unscrupulous users as other centralized platforms. OpenSea has always been a contentious issue in a sector that promotes decentralization and community control.
the total estimated value of high-profile NFTs taken as of the beginning of July, which was more than $25.4M over 823 stolen NFTs. But many of the tokens from these NFT collections—often worth millions—were falsely reported as stolen by dishonest users despite not actually being stolen. Additionally, an NFT that has ever been reported stolen is permanently devalued because it is prohibited from using OpenSea until the user who reported the theft indicates that it has been returned. This is taking place as a result of the theft of NFTs and cryptocurrencies, which OpenSea is powerless to stop.
Not stolen, NFTs are signed away
Depending on the victim’s knowledge and their familiarity with cryptocurrencies, there are several ways to steal blockchain assets, but each one requires the victim to sign away their possessions. Placing a bid in a different cryptocurrency (such stablecoins) than what is displayed is the simplest way to “steal” an NFT. For instance, if you bid 3.5 USDC (worth $3.50) for an NFT listed for 3.5 ETH (worth over $4000 as of writing), the seller might accept it and sell the NFT to you at a steep discount if they aren’t paying attention. The victim receives an email from “OpenSea” saying there is an issue with their account, and after three clicks, they have signed away their NFTs if the victim’s email address is provided. Other ways to steal NFTs include using phony airdrops or Discord scams, however they all depend on deceiving the victim into signing away their property.
OpenSea has drawn many new users into NFTs, despite the fact that customers are justified to fear its security and may steer clear of the marketplace completely. Being a centralized business, OpenSea is required to safeguard its customers like a corporate organization would: through direct action. They have no other option because many customers just lack the necessary cryptographic knowledge, despite the fact that this kind of problem management frequently results in new issues that require intervention. As a result, a dishonest NFT dealer can sell their NFT to a buyer, record it as stolen to OpenSea, then subsequently purchase it for a lower price somewhere else and declare it as returned so they can sell it on OpenSea once more. On July 2, NFT trader and Twitter user @franklinisbored brought attention to this technique.
Therefore, before purchasing an NFT, it is essential to look into its history to see whether it was stolen. In particular, examine the NFT’s OpenSea page to see if the red “Reported for suspicious activity” banner is present. Healthy skepticism and on-chain safety procedures are the only ways to prevent theft because blockchain technology makes it impossible to steal anything, including NFTs, unless the owner has explicitly given it away.