Crypto risk management company Elliptic has released a report which indicates that the scammers stole at least $100 million worth of nonfungible tokens (NFTs), starting in 2021.
In its NFTs and Financial Crime report released on August 24, 2022, Elliptic stated that crypto users had been the victim of nearly $100.6 million worth of scams that are related to NFTs in the 13 months between July 2021 and July 2022.
The company reported that even though the market downturn had caused the value of NFTs to ‘slump’ the scammers stole the most tokens in July 2022 – estimated to be 4,647 assets – and the most value in May 2022 at nearly $23.9 million.
Based on a statement by Elliptic, the most valuable nonfungible token theft the company verified as part of its analysis was a CryptoPunk that was valued at $490,000 at the time it was stolen in November last year. In December 2021, scammers managed to pilfer “16 blue chip NFTs worth $2.1 million” from one victim in the crypto space.
The report said that people had laundered over $8 million on illegal funds through nonfungible token platforms since 2017, while over $328 million went through crypto mixers including Tornado Cash, which was sanctioned by the United States Office of Foreign Asset Control in August.
In that context, the controversial mixer allegedly processed $137.6 million worth of cryptocurrency from NFT platforms and was “the laundering tool of choice” for most of these scams.
It is not clear how close the aforementioned figures were to the true value of cryptocurrency and nonfungible tokens involved in scams since most of them go unreported or are identified after that fact.
Elliptic reported over 2,000 NFTS were stolen at an approximate value of $20 million in April 2022, but the phony airdrop that targeted Bored Ape Yacht Club NFT holders accounted for approximately tens of millions of dollars stolen at the time. Elliptic’s data indicated that scammers got rid of $58.1 million worth of Ape NFTs from the Mutant Ape Yacht Club and Bored Ape Yacht Club in July 2022.
Elliptic stated:
“Across June and July 2022, thefts of valuable NFTs decreased while those affecting lower value early-stage projects rose. This trend likely partially reflects valuable NFT owners ‘hodling’ their assets throughout the bear market and not engaging as actively with new projects vulnerable to scammer activity.”
Scammers keep employing several methods to relieve crypto users of their nonfungible tokens, using phishing attacks, exploits of a marketplace, and many other ways. The tokens recently became their target in a class-action lawsuit with the possibility to influence how the United States Securities and Exchange Commission might view assets in the cryptocurrency sector as securities.
