The market may be down, but the scammers are still out in full force. NFT sales fell despite cryptocurrency price crashes in May and June, with the highest number of NFT thefts reported in July.
This year alone, more than $100 million worth of NFTs have been stolen This staggering statistic comes to us from blockchain research firm Elliptic.
Stolen NFTs are on the rise – Photo by Mikhail Nilov
How do scammers access your NFT?
A common way NFTs are stolen is through compromised security through social media. It could be like arranging an NFT trade with someone you thought you trusted, only to find out they were 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 compromising Project Discords and even scammers in your DMs, it’s always important to be on the lookout. 23% of NFT thefts this year came from social media security compromises, so it has to be cautious.
Of course, social media isn’t the only way to steal your NFTs. Many of us have seen fake mint links, scammers posting phishing links disguised as official ‘stealth’ drops. Another way to steal NFTs is through ‘free mints’. Many of us now have lighter wallets, and so free coins have gained popularity. But if you’re not careful, you could be setting up authorization for scammers to sign your NFT.
How much do scammers earn from stolen NFTs?
Elliptic says that NFT thieves get an average of $300,000 per scam. This number could be much higher, as not all thefts are publicly reported. So that they can get away with their loot, money is usually laundered. Money-laundering on NFT-based platforms is said to sit at $8 million. However, about $329 million worth of funding in the NFT market came from ‘cryptocurrency mixers’. These mixers are used to launder funds generated from NFT scams and they hide the source of the funds. Be aware – while some scams may be the work of lone wolves, there are bigger fish out there. Citing the theft of $540 million linked to North Korea in April LazarusgroupEllipse says:
“There is a growing threat to NFT-based services from unauthorized entities and state-sponsored exploitation.”
Scammers cashing in on the misfortune of others – Photo by RODNAE Productions
With such huge statistics surrounding NFT theft and growing scams, staying safe and protecting your assets is more important than ever. Check out our guide where we chat with Ledger about NFT security and protecting yourself from scams.
All investment/financial opinions published by NFTevening.com are not recommendations.
This article is educational material.
As always, do your own research before making any type of investment.
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