Over $100 Million in NFTs Stolen Since 2021
Cryptocurrency risk management firm Elliptic published a report stating that since 2021, fraudsters have stolen over $100 million worth of NFTs.
In its report on NFTs and financial crime released Wednesday, Elliptic said cryptocurrency users fell victim to about $100.6 million worth of NFT-related fraud in the 13-month period from July 2021 to July 2022.
Decline in value of stolen tokens
The firm reported that although the market downturn led to a “sharp decline” in the value of NFTs, fraudsters stole the most tokens in July 2022 – an estimated 4,647 assets – and the most value in May 2022 – about $23.9 million.
According to Elliptic, the most valuable NFT theft the firm has verified as part of its analysis was a CryptoPunk, worth $490,000 at the time of its November 2021 theft. In December 2021, scammers were able to steal “16 NFTs of large projects worth $2.1 million” from a single victim in the crypto space.
The report states that since 2017, individuals have laundered over $8 million in illicit funds through NFT platforms, and over $328 million has passed through cryptocurrency mixers, including Tornado Cash, sanctioned by the U..S Office of Foreign Assets Control in August. The controversial mixer reportedly processed $137.6 million worth of cryptocurrency from NFT platforms and was a “preferred laundering tool” for most scams. Tornado Cash is believed to have been used to launder at least $2.4 billion in Ethereum.
Bored Ape Theft
It is unclear how close the above figures are to the true value of the cryptocurrencies and NFTs involved in fraud, as many are not accounted for or identified after the fact. Elliptic reported that more than 2,000 NFTs worth an estimated $20 million were stolen in April 2022, but the fake airdrop targeting Bored Ape Yacht Club NFT holders represents an estimated tens of millions of dollars stolen at that time.
Elliptic’s data shows that in July 2022, fraudsters stole $58.1 million worth of NFTs from Bored Ape Yacht Club and Mutant Ape Yacht Club.
“In June and July 2022, thefts of valuable NFTs declined, while those involving lower-value early-stage projects increased.” Elliptic said. “This trend likely reflects, in part, owners of valuable NFTs HODLing their assets during the bear market and not engaging as actively with new projects vulnerable to fraudster activity.”
Bad actors continue to use a variety of methods to swipe cryptocurrencies and NFTs from users – through phishing attacks, marketplace exploits, and more. Digital tokens have recently become the subject of a class action lawsuit that has the potential to impact how the U.S. Securities and Exchange Commission may view assets in the crypto space as securities.