by Traverse Legal, reviewed by Enrico Schaefer - February 14, 2023 - Non-Fungible Tokens (NFTs)
Non-fungible tokens, or NFTs, have become increasingly popular in recent years. As a result, the number of NFT-related thefts has risen as well. One standard method that scammers use to steal NFTs is by sending a link to a user that, when clicked, compromises the user’s wallet and allows the thief to transfer the valuable NFT to their own account. The thief can then quickly resell the NFT to an innocent third party, making a profit while the original owner is left empty-handed.
The NFT market exploded in 2022, and it seemed like OpenSea was spending more time focused on its own growth and investor relations than on protecting its customers. For many platforms, the priority is growth rather than customer service. This means platforms like OpenSea fail to properly train customer service teams, which can lead to many horror stories by users who not only got scammed by a third party but then got run over by OpenSea’s refusal or failure to provide any assistance. In some cases, the inept assistance provided by OpenSea makes the problem drastically worse. Stories by platform users wherein a response by OpenSea takes days, weeks, or months are all too common.
While users are responsible for avoiding clicking on malicious links, even experienced blockchain technicians and NFT traders are getting scammed. This highlights the need for platforms like OpenSea—one of the largest NFT marketplaces—to take greater responsibility for protecting users.
Many people believe that OpenSea could be doing more to prevent the transfer or sale of stolen NFTs. Some users are calling for stricter verification processes and more stringent security measures to be put in place. As the NFT market grows, platforms like OpenSea must take the necessary steps to protect their users and maintain the market’s integrity. Ultimately, the responsibility falls on both the platform and the users to ensure the security of their assets, but platforms like OpenSea must take proactive measures to prevent the theft and sale of stolen NFTs.
One of Traverse legal’s clients is pursuing litigation and/or arbitration against OpenSea for an inexplicable series of events created by its lack of response or inept response to one such NFT theft. OpenSea employees were trying to extort the platform used for a de facto ‘release of liability’ in exchange for regaining control of his account and dozens of his NFTs.
You can read the sequence of events below.
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Founding attorney Enrico is a seasoned consultant who guides companies, including law firms, in effectively integrating artificial intelligence (AI). With a wide range of consulting services, Enrico assists clients in harnessing the power of AI while ensuring ethical and responsible implementation.
Years of experience: 35+ years
This page has been written, edited, and reviewed by a team of legal writers following our comprehensive editorial guidelines. This page was approved by attorney Enrico Schaefer, who has more than 20 years of legal experience as a practicing Business, IP, and Technology Law litigation attorney.
