(Duplicated) Elliptic Report Reveals NFTs Worth $100m Stolen in Past Year

Blockchain research firm Elliptic, a London-based blockchain research firm, released a report on Wednesday indicating that thieves stole over $100 million worth of non-fungible tokens (NFTs) in the year to July.

The NFT market surged in 2021 as crypto-wealthy investors spent billions of dollars on the assets, hoping to profit as prices soared.

Scams have remained widespread in the NFT market despite NFT prices, and sales volumes plunged alongside cryptocurrency prices crash since May.

Elliptic identified that July saw the highest number of NFTs reported stolen on record.

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

According to Elliptic, thieves obtained an average of $300,000 per scam. However, it added that the true scale of NFT thefts is likely to be even higher because not all crimes are publicly reported.

The report placed the number of funds siphoned through money-laundering in NFT-based platforms at just $8 million. Elliptic said nearly $329 million worth of funds in the NFT market came from services like the so-called cryptocurrency mixers, which are designed to hide the flow of crypto fund transactions.

One of such mixers is Tornado Cash, which was used for laundering just over half of the proceeds of NFT scams before it was sanctioned by the US this month, Elliptic revealed.

"There is a growing threat to NFT-based services from sanctioned entities and state-sponsored exploits," Elliptic said.

In April, U.S. officials linked North Korean state-backed hacking group Lazarus, to the recent theft of $625 million in cryptocurrency from the Ronin Network, an Ethereum-based sidechain made for the popular play-to-earn game Axie Infinity.

The rise in such thefts comes as the market for NFTs exploded last year, growing to an estimated $22 billion. The significant growth of the NFTs eventually attracted giant, international auction houses such as Sotheby's and Christie's and drove multimillion-dollar auctions for these new digital assets' ownership certificates.

NFT marketplaces like OpenSea have proliferated – OpenSea is currently valued at $13 billion. Despite such a remarkable rise, these firms are doing too little to prevent trades in fraudulent NFTs. These NFT platforms charge transaction fees from artists and even place much of the burden of policing art fraud on the artists themselves.