An extensive recent report by crypto audit firm Elliptic shows the methods cybercriminals use to steal and profit from the huge hype generated by NFTs, hyped for the sake of cautious consumers.
Phishing, scam projects, stolen and plagiarized NFTs, market manipulation, and blanket trading, the combined value of financial crimes associated with NFT transactions exceeds $100 million, per monkey business instance The average value is $300,000. July 2022 has been the most profitable month for cybercriminals so far, with over 4,600 NFTs stolen.
🚨NFTs worth over $100 million publicly reported as stolen via scams between July 2021 and July 2022, per scam On average, offenders net $300,000.
Go to https://t.co/u6iPLjXgpR to read our NFT and Financial Crime Report. #nft #crypto #aml
— Ellipse (@elliptic) August 24, 2022
Phishing for Trouble
More than half of the above figure — $69.5 million to be exact — represents the value of NFTs stolen through various methods. The vast majority of thefts are carried out through phishing attacks.
80.1% of stolen digital artwork was obtained through email and social media-based phishing. The rest is done through exchange scams, impersonation scams, and other methods.
Oddly enough, phishing attacks aren’t just used to mitigate the property of careless collectors. Some phishing scams either airdrop free NFTs or sell cheap NFTs – usually in .svg format – that act as Trojan horses that, once received, give bad actors access to users’ wallets, or in some cases , would reveal the collector’s IP address, and more.
The rug will never go away
Although 2017 is long gone, the practice of pulling the rug never disappeared. However, the report clarifies that not all NFT pulls over the past year started in bad faith.
While bad actors abound in the NFT space, the document shows that many projects over the past year, started by honest developers who over-promised and when faced with When their delivery attempts were futile in reality, they decided to quit the scam and go into hiding.
Rug pulls inside have been relatively inefficient over the past year, with scammers making only a few thousand dollars before moving on to the next unfortunate victim. However, there are some exceptions — like the Evolved Apes fiasco, where the crooks netted nearly $2.5 million from hopeful BAYC latecomers.
Gaining Personal Identity
The report also draws attention to more vile tactics. These tactics include fake deals — the practice of repeatedly selling something between two or more parties to drive up a price — market manipulation that uses celebrities’ influence over their communities, and outright blackmail against project developers.
The report concludes with several recommendations for users looking to protect themselves from becoming victims – and warns readers that possible future scams may take a form not found anywhere else, urging everyone Be vigilant.
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