$100 million worth of NFTs stolen in past year, Elliptic says

The logo of Elliptic is seen on their exhibition stand at the Delta Summit, Malta’s official Blockchain and Digital Innovation event promoting cryptocurrency, in Ta’ Qali, Malta October 3, 2019. REUTERS/Darrin Zammit Lupi

LONDON, Aug 24 (Reuters) – Thieves stole more than $100 million of non-fungible tokens in the year to July, blockchain research firm Elliptic said on Wednesday, as the fast-growing digital asset became a new front in crypto’s hacking problem.

NFTs are blockchain-based assets that represent digital files such as images, video or text. read more

The market surged in 2021 as crypto-rich speculators spent billions of dollars on the asset, hoping to profit as prices rose. But since cryptocurrency prices crashed in May and June this year, NFT prices and sales volume have plummeted. read more

Fraud remains rife in the NFT market even as it slows, with the highest number of NFTs reported stolen in July, London-based Elliptic said in a report.

Security compromises via social media have increased, accounting for 23% of NFT thefts in 2022, it said.

Thieves received an average of $300,000 per scam, Elliptic said. The true scale of NFT theft is likely to be even higher, given that not all crimes are publicly reported, it added.

Hacking and fraud have long plagued the crypto industry, while regulators around the world are increasingly concerned about the use of crypto assets in cybercrime.

Elliptic put the amount of money laundering on NFT-based platforms at just $8 million. But nearly $329 million worth of funds in the NFT market came from services like so-called cryptocurrency mixers, which are designed to hide the funds’ origins, Elliptic said.

One such mixer, Tornado Cash, was used to launder just over half of the proceeds of NFT fraud, Elliptic said, before it was sanctioned by the US this month. read more

“There is a growing threat to NFT-based services from sanctioned entities and state-sponsored exploits,” Elliptic said, citing a $540 million theft in April that US officials have linked to North Korea’s Lazarus Group.

Reporting by Elizabeth Howcroft; editing by Jason Neely

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