The number of bad actors competing for pieces of the multi-million dollar pie increases as the NFT community evolves. As a result, NFT theft is becoming more expensive. In some cases, people have lost millions of dollars.
The first thing you should be aware of if you want to create your own NFT collection is rugs and scams within the group. If you’ve been able to protect your digital assets and avoid NFT scams, you still need to be vigilant. Keep in mind that under Web3, third parties will not be able to do anything for you. You have to rely on your own research and judgment. Therefore, constant monitoring is necessary, as theft can occur even among the most vigilant users.
Let’s look at some of the most expensive NFT losses and thefts while keeping this in mind. This acquaintance can help you understand what went wrong and how to avoid costly NFT theft in the future.
Todd Kramer, owner of Chelsea Art Gallery, has had a challenging year to say the least. Ross + Kramer Gallery is run by Kramer, who had some issues with some of his own artwork in late 2021. Kramer discovered that several NFT images from his personal collection had been stolen from OpenSea, the world’s largest NFT market, on the 30th. December.
In a tweet that was then deleted, he explained what happened. Bored Apes and Mutant Apes, two of the most valuable NFTs on the market, were the bulk of NFTs. As a result of the crime, Kramer lost $ 2.2 million.
Kramer asked for help from OpenSea as soon as the company quickly froze all on-site transactions until Kramer was able to recover its lost monkeys. Many members of the community criticized him for not using a hardware wallet to store such a valuable NFT. Because they are not connected to the Internet until they are connected, hardware wallets (also known as “cold wallets”) are useful tools to prevent costly NFT theft. As a result, it is more difficult to break into them.
Unfortunately, Kramer was using a hot wallet that is always connected to the internet. As a result, it is more vulnerable.
Users also criticized OpenSea for participating, saying that NFTs are not really distributed if one company can stop trading in this way. In response to the criticism, OpenSea issued a statement. “Our goal as a blockchain explorer is to provide the broadest view of NFTs across multiple blockchains.” We do not have the right to freeze or deregister NFT on these blockchains, but we can prevent anyone from using OpenSea to buy or sell stolen products. We’ve been building security measures and procedures to prevent theft on OpenSea since we discovered the problem. “We are stepping up our customer service, trust and security and integrity of the website so that we can better protect and empower our users,” they said.
Kramer was returned with most of his stolen collection, thankfully. This time, he might keep them in a safer position.
More OpenSea problems
Unfortunately, just a month after Kramer’s monkeys were stolen, the OpenSea victim was another notable robbery. In February, online users discovered a million-dollar crime trail. To do this, the hacker used a phishing attack, which is one of the oldest methods in the book.
This came just one day after OpenSea upgraded its smart contract infrastructure to protect customers from bugs that allowed attackers to acquire NFT for a fraction of their market value. This was made possible due to a technical flaw that allowed previous agreements to be on the blockchain but not be visible in OpenSea. Many of the agreements had been in force for more than a decade. Attackers could bid against such contracts to take advantage of unusually low, obsolete prices.
As a result, all OpenSea customers had to transfer their NFT listings to a new smart contract. The hacker used a phishing attempt to exploit the move.
The hacker managed to persuade 17 individuals to transfer part of their valuable NFT files to their OpenSea account. Among the stolen NFT cars were four Azukis, two Coolmans, two Doodles, two KaijuKings and one Mutant Ape Yacht Club. They sold these NFTs quickly and made a profit of over $ 1.7 million.
The Nifty Gateway has been broken into.
In March, another expensive NFT was stolen, this time at a different level. Several Nifty Gateway users have stated that their social media profile has been compromised.
These accounts were used by hackers to buy and sell NFT for hundreds of thousands of dollars. What’s the worst of it all? Because the fraudulent transactions were charged to their credit cards, those who had stolen their accounts were left with the bag. This is because of one of the unique features of the Nifty Gateway platform: customers can charge for both their credit cards and their wallet.
Despite the fact that Nifty Gateway has publicly verified the issue, they blamed it on users rather than any obvious platform flaws. “None of the affected users had 2FA (dual authentication) configured,” a Nifty Gateway representative told the motherboard. This indicates that hackers used standard phishing methods to gain access to these accounts and could do so only by identifying the passwords of the affected people.
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