By
Temitope Olatunji
April 24th, 2024
Scammers have continued to employ new tricks of swindling crypto users out of their prized NFTs.
Blockchain analytics firm Elliptic has issued a fresh NFT report for 2022 that it calls “NFTs and Financial Crime.” The report documents scams, thefts, and all forms of illicit activities that are related to non-fungible tokens (NFTs).
According to the report, no less than $100 million worth of NFTs were siphoned by bad actors within 13 months. That is between July 2021 and July 2022. But there is a very high chance that the true figures are way higher. And that is because many cases of NFT thefts still go either undetected or under-reported.
How Over $100 Million Was Lost
Elliptic claims that the highest monthly theft was recorded in July 2022. The month saw scammers making away with an estimated total of 4,647 assets. However, in terms of value, May 2022 saw the highest NFT loss. In May, a loss of about $24 million was reportedly recorded.
Elliptic also shared the highest-value NFT theft that occurred with a single NFT. This happened in November 2021, when a scammer stole a CryptoPunk that was valued at $490,000 at the time. The report also mentioned the highest value lost to an NFT theft by an individual which occurred barely a month after the CryptoPunk theft. In December 2021, a victim lost 16 blue chip NFTs. At the time, those were worth $2.1 million – the highest loss by a single victim.
NFT Report: The Trends
Notably, the cases reported by Elliptic may appear high. However, they represent only a small fraction – 0.65%, of the total trading volume within that timeframe. Per TheBlock data, nearly $15.3 billion worth of NFT transactions took place between July 2021 and July 2022.
Meanwhile, it is also noteworthy that the recent bear market had little or nothing to do about NFT thefts as would normally be expected. While values of NFTs reduced following the UST-Terra collapse, NFT thefts have probably picked up the pace. At least, that is what the number of thefts in July 2022 shows. A key takeaway from this, however, would be that high-value NFT holders did not actively transact during the bear market period. But new projects did the exact opposite, leaving themselves vulnerable to scam activities.
Scammers have continued to employ new tricks of swindling crypto users out of their prized NFTs. And this, in turn, is drawing the attention of regulators such as the US Securities and Exchange Commission (SEC) in recent times.