The market may be down, but scammers are still out in full force. Although cryptocurrency prices fell in May and June and NFT sales declined, July saw the highest number of NFTs stolen.
More than $100 million worth of NFTs have been stolen this year alone. These staggering figures come to us from blockchain research firm Elliptic.
How can fraudsters get your NFTs?
One common way NFTs are stolen is through compromised security through social networking. This could look like arranging an NFT trade with someone you thought was trustworthy, only to find out they were a scammer and had no interest in sending NFT in return. Discord is another social media method where you will often see scammers. From fake phishing links to falling victim to Project Discords or even scammers in your DMS, it’s always important to be cautious. 23% of NFT thefts this year came from social media security compromises, so it’s worth being careful.
Of course, social media isn’t the only way to steal your NFTs. So many of us have come across fake Mint links, scammers posting phishing links masquerading as official ‘stealth’ drops. Another route to NFT theft is through ‘Free Mints’. Many of us have lighter wallets these days, and that’s why free mints have become popular. But if you’re not careful, you could be setting up a license to sign your NFTs to fraudsters.
How much do fraudsters get from stolen NFTs?
Elliptic claims that NFT thieves receive an average of $300,000 per scam. Since not all thefts are reported publicly, this number could be much higher. The money is often smuggled so that the robbers can get away with it. The amount of money circulating in NFT-based platforms is said to be $8 million. However, about $329 million in the NFT market came from ‘cryptocurrency mixers’. These mixers are used to launder the funds made from NFT scams, and hide the origin of the funds. Be careful – while some scams may be the work of a lone wolf, there are bigger fish in the game. Referring to the theft of $540 million linked to North Korea in April Lazarus groupElliptic said:
“NFT-based services are under increasing threat from unauthorized entities and government-sponsored exploits.”
With such huge numbers of NFTs being stolen and scams on the rise, it’s more important than ever to stay safe and protect your assets. Check out our guide to discussing NFT security and protecting yourself from scams with Ledger.
All investment/financial opinions expressed on NFTevening.com are not recommendations.
This article is educational material.
As always, do your own research before making any investment.