For several weeks, many investors have reported having their NFTs stolen by hackers. Each time, these were resold on the same platform on which they were initially posted: OpenSea. The NFT giant is now facing several lawsuits from disgruntled users.
It’s both fun and worrying, depending on which side of the NFT spectrum you’re on. For about a month, several holders of non-fungible tokens have reported having their collection stolen by hackers. Phishing, social engineering or even exploitation of flaws, the techniques diverge, but the result is always the same: hackers resell the recovered NFTs for less than their initial price.
Probably the most notable example is the $2.8 million 91 Bored Ape collection that went missing. The same thing happened to Chris Chapman, also the owner of a Bored Ape which he put up for sale on OpenSea for around 1 million dollars. Two months later, he receives a notification telling him that his NFT has been bought for $300,000, thanks to a flaw discovered by a hacker.
OpenSea draws the wrath of all users
Within a few months, OpenSea has become the number one platform for buying and selling NFTs. After raising $400 million from investors, the company is now valued at $13.3 billion. A success that it owes, among other things, to its terribly efficient business model: OpenSea receives a 2.5% commission on each sale.
Only then, OpenSea had certainly not foreseen its exponential rise in popularity. As a result, many now consider that the platform is absolutely not secure, and that everyone risks being scammed in one way or another. The firm has committed “many stupid mistakes”believes Chris Chapman, who adds that its leaders “don’t really know what they are doing”.
It is clear that unfortunate events follow one another on the platform and that the latter is very helpless in the face of the scale of the phenomenon. Today, many users accuse OpenSea of not blocking the resale of stolen NFTs by hackers, as this would prevent it from earning the commission. Currently, the company is involved in four lawsuits.
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Piracy, theft, plagiarism: OpenSea, the Wild West of NFTs
Forced to react, OpenSea assured work hard to improve the security of its platform. “Like any tech company, there is a period when you catch up”explained Devin Finzer, general manager of the firm. “You try to do everything you can to accommodate the newest users coming into space”.
Another major problem, OpenSea does not seem to have an effective system for recognizing works. DeviantArt, another platform for artists, said that more than 290,000 works posted on the marketplace are actually plagiarisms of works posted on its site. OpenSea has nevertheless implemented an algorithm that scans each published NFT, but it only compares it to other NFTs on its own site.
These issues come in an already stormy time for Open and for the NFT world in general. In recent times, searches on Google related to the subject have dropped by 75%. NFT sales have plummeted 90% since last September. While the enthusiasm for the technology seems to be fading on the side of the general public, OpenSea must also face growing competition which could well take advantage of its security shortcomings.
Source: New York Times