Cryptocurrency risk management company Elliptic claims in a recent report showed more than $100 million and nonfungible tokens, or NFTs were stolen by criminals in the year 2021.
According to Elliptic’s NFTs and Financial Crime research, 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.
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.
According to Elliptic, the most expensive NFT theft the company validated as part of its study involved a CryptoPunk that was stolen in November 2021 and was worth $490,000. Scammers were successful in stealing “16 blue chip NFTs valued at $2.1 million” from a single victim in the cryptocurrency industry in December 2021.
According to the report, individuals have used NFT platforms to launder more than $8 million in illegal assets since 2017, while Tornado Cash, a cryptocurrency mixer that was sanctioned by the US Office of Foreign Asset Control in August, processed more than $328 million in criminal funds.
According to reports, the contentious mixer handled $137.6 million in cryptocurrency via NFT platforms and served as “the laundering tool of choice” for the majority of schemes.
Given that many scams go unreported or are discovered after the fact, it is unknown how closely the aforementioned estimates represented the actual worth of the cryptocurrency and NFTs utilized in them.
In April 2022, Elliptic announced that more than 2,000 NFTs with a rough worth of $20 million had been stolen, but estimated tens of millions of dollars had actually been stolen thanks to a false airdrop that targeted NFT holders of the Bored Ape Yacht Club.
Elliptic’s research showed that in July 2022, fraudsters stole ape NFTs worth $58.1 million from the Mutant Ape Yacht Club and the Bored Ape Yacht Club.
According to Elliptic, “during the course of June and July 2022, thefts of valuable NFTs reduced while those affecting less valuable early-stage enterprises increased.”
This trend is probably due in part to valuable NFT owners ‘hodling’ their assets during the downturn market and not participating as actively in new projects that could be targeted by scammers.
Scammers still utilize a number of techniques, like as phishing attempts, market exploitation, and others, to steal NFTs from cryptocurrency users.
The U.S. Securities and Exchange Commission may redefine how it views assets in the cryptocurrency market as securities as a result of a class-action lawsuit recently filed against the tokens.
