- Recently sanctioned Tornado Cash was the source of $137 million of crypto assets processed by NFT marketplaces and the laundering tool of choice for 52% of NFT scam proceeds.
- The report adds that cybercriminals netted an average of $300,000 per scam.
- 4,600 NFT’s were stolen in July 2022, making it the highest month on record for the number of NFTs stolen.
The latest report by blockchain analytics firm Elliptic points out that over $100 million in NFTs have been stolen between July 2021 and July 2022. The report titled “NFTs and Financial Crime” states that over $8 million of illicit funds has been laundered through NFT-based platforms since 2017 – representing 0.02% of trading activity originating from known sources.
As per the report, the recently sanctioned crypto mixer Tornado Cash was also the source of $137.6 million of crypto assets processed by NFT marketplaces and the laundering tool of choice for 52% of NFT scam proceeds.
The report’s finding on Tornado Cash further strengthens OFAC-Office of Foreign Assets Control’s allegations that the crypto mixer helped North Korea’s Lazarus hacking group launder millions of dollars’ worth of crypto proceeds stolen from various crypto projects over the past two or three years.
“There is a growing threat to NFT-based services from sanctioned entities and state-sponsored exploits,” Elliptic said, citing a $540 million Ronin theft in April which U.S. officials have linked to North Korea’s Lazarus Group.
Elliptic’s report further adds that cybercriminals netted an average of $300,000 per scam. The true scale of NFT thefts is likely to be even higher, given that not all crimes are publicly reported, it added.
Its report notes that $24 million in NFTs were stolen through scams in May 2022 alone, with July 2022 being the highest month on record for the number of NFTs stolen at 4,600.
“The most valuable NFT ever stolen is CryptoPunk #4324, which was sold by scammers soon after the theft on 13 November 2021 for $490,000,” the Elliptic report reads.
Elliptic notes the most significant theft resulted in the loss of 16 “blue chip” NFTs worth $2.1 million in December 2021. The renowned Bored Ape Yacht Club NFTs remain a favorite among crypto criminals.
According to Elliptic, the theft of Bored Apes accounts for $43.6 million in stolen NFTs. According to the firm, Bored Apes, Mutant Apes, Azuki, Otherside, and CloneX constitute over two-thirds of the stolen NFT value since July 2021.
The report further highlights how compromised social media accounts play NFT thefts. Elliptics cites the growing availability of tailored malware as a major reason for social media, especially in Discord.
“Having risen by nearly 400%, social media compromises now account for 23% of all social media theft, though phishing is by far the most common avenue for theft at over 50%”, Elliptic reports. As evident from the report’s findings, despite the market for NFT dwindling this year, NFT scams and thefts show no signs of ending anytime soon.