McKimmy filed a lawsuit against OpenSea alleging that his BAYC NFT was stolen due to a security flaw that OpenSea was aware of but chose to ignore
Three BAYC NFT Owners Slam OpenSea
Following the loss of their BAYC NFTs in a similar hack that took advantage of an apparent security vulnerability in the platform’s code, Michael Valise and Timothy McKimmy filed separate lawsuits against the American digital marketplace.
On February 18, McKimmy filed a lawsuit against OpenSea, alleging that his NFT was stolen due to a security flaw that OpenSea was aware of but chose to ignore.
According to McKimmy’s lawyer, Ash Tadghighi, OpenSea allows users to connect their wallets to the platform; as a result, NFTs on such wallets that are not yet listed on the platform can be seen by other users who can make offers on them.
The Lawsuit Claims Are Massive
On February 7, an anonymous user made an offer for a meager 0.01 ETH ($26 at the time), hacking the platform’s code, and accepting the ridiculous offer on behalf of McKimmy. In essence, they sold the BAYC NFT to themselves at a significantly reduced price.
They then sold it to another user for 99 ETH ($257k) – a price McKimmy still believed was below the value of his BAYC asset, claiming his NFT should have gone for $1.3m based on its rarity.
Lawyers Ash Tadghighi and Andrew Dao received several offers to represent others in similar cases after choosing to represent McKimmy in his unprecedented lawsuit. They chose to take up Michael Valise’s case, who had a similar ordeal on January 26.
In Robert Armijo’s case, however, there were inexplicable delays in response time from OpenSea. Armijo lost three of his valuable NFTs – two Mutant Apes and one Bored Ape – after clicking on a bogus link sent to him by a user he met on the Cool Cats Discord server. He claims to have paid $300,000 for them.
Armijo contends that, while the hack did not occur on OpenSea, OpenSea contributed to his loss by failing to respond on time when he contacted them via several means to freeze the assets upon upload to the platform, preventing them from being sold.
The assets were later sold on OpenSea, and after responding to his plea a little late and freezing the listed Mutant Apes, the hacker listed the assets on LooksRare—another NFT marketplace—and sold them almost immediately. LooksRare has been named as a defendant in Armijio’s lawsuit.
In the past, OpenSea has been the victim of several hacks in which users’ assets were either stolen or sold at low prices. It remains to be seen what steps the platform will take to address this growing issue, especially now that they have three lawsuits to deal with as a result of it.
