A report from cryptocurrency risk management company Elliptic indicates that nonfungible tokens worth more than $100 million were stolen by NFT scammers starting in 2021.
Although the value of NFTs had slumped due to the market downturn, the company found that scammers had stolen the most tokens in July 2022, an estimated 4,647 assets, and the highest value in May 2022, an estimated $23.9 million.
NFT scammers prevailed despite market downturn
According to Elliptic’s NFTs and Financial Crime report, which was published on Wednesday, in the 13-month period between July 2021 and July 2022, crypto users have fallen prey to NFT-related frauds totaling over $100.6 million.
“Across June and July 2022, thefts of valuable NFTs decreased while those affecting lower value early-stage projects rose,” Elliptic said. “This trend likely reflects valuable NFT owners hodling their assets throughout the bear market and not engaging as actively with new projects vulnerable to scammer activity.”
Elliptic reports that the most expensive NFT theft it has ever verified as part of its study involved a CryptoPunk that was snatched in November 2021 and had a market worth of $490,000. Scammers in the cryptocurrency industry managed to steal “16 blue chip NFTs worth $2.1 million” from a single victim in December 2021.
In contrast, more than $328 million went through crypto mixers like Tornado Cash, sanctioned by the U.S. Office of Foreign Asset Control in August, where individuals had laundered more than $8 million in criminal transactions since 2017.
According to reports, the problematic mixer processed crypto from NFT platforms valued at $137.6 million and served as “the laundering tool of choice” for the majority of fraudsters.
No backing down
Elliptic reported more than 2,000 NFTs taken in April 2022, with an approximate worth of $20 million, but the fake airdrop targeting Bored Ape Yacht Club NFT holders accounted for tens of millions of dollars stolen at the time. According to Elliptic data, scammers withdrew $58.1 million in Ape NFTs from the Bored Ape Yacht Club and Mutant Ape Yacht Club in July 2022.
Scammers still utilize a variety of techniques, including phishing assaults, market exploits, and others, to steal NFTs from cryptocurrency users. A class action lawsuit has recently been filed against the tokens with the potential to change how the U.S. The Securities and Exchange Commission may consider certain cryptographic assets to be securities.
Given that many frauds go undetected or aren’t reported, it’s unknown how close the aforementioned statistics were to the actual worth of cryptocurrency and NFTs affected.