According to blockchain research firm Elliptic, more than US$100 million worth of non-fungible tokens were stolen by attackers in the year to July.
Security compromises via social media have skyrocketed since NFT gained prominence, accounting for 23 per cent of NFT thefts in 2022.
While NFT thieves received an average of US$300,000 per scam, the extent of NFT scams remains unknown. However, analysts believe that NFT scams will be higher than the available figures, as several other incidents go unreported.
The amount of money laundering on NFT-based platforms is estimated to be about $8 million. Almost US$329 million of money in the NFT market came from services such as cryptocurrency mixers.
Crypto-mixers are supposed to hide the origin of the funds, but one of these mixers, Tornado Cash, was used to launder more than half the proceeds of NFT scams before it was sanctioned by the United States this month.
The cryptocurrency industry has long suffered from fraud, in which attackers exploit various vulnerabilities in crypto exchange systems to illegally mine bitcoin, ether, and others.
While Bitcoin, NFTs, and other cryptocurrencies have grown in popularity, fraud targeting the industry has also skyrocketed. Since the industry is largely unregulated, tracking and catching criminals remains a difficult task.
The sources for this piece include an article in Reuters.