Hackers stole over $100 million worth of NFTs in the past year, report

In just two years, Non-fungible tokens (NFTs) have grown from under $100 million in 2020 to surpass $40 billion in 2021. The NFT market cap is now forecast to reach over $80 billion by 2025. However, as NFT popularity soars, so is the number of hacking incidents. The number of NFT thefts skyrockets in the last few months as hackers shifted their tactics and began to set their sights on NFTs.

According to a new report from blockchain research firm Elliptic, cyber thieves have stolen over $100 million worth of NFTs since July of 2021. Even with the decline in NFT sales, the London-based Elliptic said in its report that scams remain rife in the NFT market. The firm also added that “security compromises via social media have surged, accounting for 23% of NFT thefts in 2022,” Reuters reported.

Elliptic said that cyber thieves received an average of $300,000 per scam, adding that the true scale of NFT thefts could be higher because not all NFT thefts are publicly reported.

“There is a growing threat to NFT-based services from sanctioned entities and state-sponsored exploits,” Elliptic said, citing a $540 million theft in April which U.S. officials have linked to North Korea’s Lazarus Group.

The firm explains that nearly $8 million of the theft are involved in money-laundering on NFT-based platforms, with another $329 million worth of funds in the NFT market coming from services such as the so-called crypto tumbler or cryptocurrency mixers, which are designed to hide the funds’ origin.

In February, about $2 million worth of NFTs were stolen from the world’s first and the largest NFT marketplace OpenSea in a phishing hack. The company’s CEO Devin Finzer also confirmed that the platform was hit by a phishing attack and at least 32 users had lost their valuable NFTs worth $1.7 million.

Then two months later, in April, hackers again stole $13.7 million from the Bored Ape Yacht Club (BAYC) NFT project. The group said that hackers stole 54 NFTs estimated to be worth $13.7 million after BAYC’s Instagram account and Discord server were breached.

NFTs are digital tokens that can’t be exchanged for one another. They’re often touted as a way to prove ownership of digital assets like art or sports collectibles. Since its popularity a year ago, crypto-enthusiasts, celebrities, and brand marketers jumped on the NFT train hoping to cash in. However, the NFT entered a bear market early this year and sales have been in a freefall ever since.

NFT sales have dropped by 95% in monthly trading volume, from nearly $17 billion in total trading volume across all platforms in January 2022 versus sales of $800 million in August this year.