According to blockchain research company Elliptic, over $100 million worth of non-fungible tokens were stolen in the year leading up to July, opening a new front in the hacking problem facing cryptocurrency.
NFTs are assets built on the blockchain that represent digital files like text, video, and image files. View More
Cryptocurrency-rich speculators spent billions on the assets in 2021, hoping to profit as prices increased. However, NFT prices and sales volumes have fallen since the collapse in cryptocurrency prices in May and June of this year.
Despite the market’s decline, scams are still commonplace, with the highest number of NFTs reported stolen ever in July, according to a report from London-based Elliptic.
According to the report, social media security breaches will be responsible for 23% of NFT thefts in 2022.
According to Elliptic, thieves made an average of $300,000 per scam. Given that not all crimes are made public, the actual number of NFT thefts is probably even higher, it was added.
The crypto industry has long been plagued by hacks and scams, and regulators all over the world are growing more concerned about how crypto assets are being used in cybercrime.
Elliptic estimated that only $8 million was being laundered through NFT-based platforms. However, Elliptic reported that services like so-called cryptocurrency mixers, which are intended to conceal the source of the funds, provided almost $329 million of the funds in the NFT market.
Before it was banned by the United States this month, Elliptic claimed that one such mixer, Tornado Cash, was used to launder just over half of the money gained from NFT scams.
Elliptic stated that “there is a growing threat to NFT-based services from sanctioned entities and state-sponsored exploits,” citing a $540 million theft in April that U.S. officials have connected to North Korea’s Lazarus Group.
