And while attention tends to focus on the higher-profile, higher-value events - think Wintermute, Mango Markets, Wormhole and Axie Infinity (which amount to more than $1 billion in stolen funds) - other types of theft continue to happen right under our noses, to almost no fanfare or recourse.
The phenomenon has been popularised on crypto Twitter - driven by self-taught internet sleuths who are determined to lift the veil on shady crypto operators and influencers.
EthScamCheck).
More pertinently, there remains limited data on the perpetrators and wallets involved, nor sufficient communication between protocols and platforms to inform of high risk events. In this series, we seek to shed light on these issues and the accounts and addresses behind some of the more egregious heists.
Limited data, no recourse**
Part of the reason these issues fly under the radar is because the victims are individuals, with few or no legal routes. They typically do not know who the perpetrator is, nor have any way of conducting investigations to unpick the attacker’s identity.
OpenSea, the world’s largest NFT marketplace, indicates that almost 1,000 NFTs belonging to the top seven collections have been marked as suspicious or stolen in the last year.
Mutant Ape Yacht Club, which has suffered at least 268 transfers of stolen or suspicious goods across 207 assets in the last year and a half. This is around 1.1% of the entire collection.
Clonex, Azuki, and Bored Ape Kennel Club, ranging between 0.87 - 1.34%.
Bored Ape Yacht Club outstrips them all. The floor price for BAYCs is ETH 78 ($101,000). They are among the most highly-valued assets in the NFT ecosystem.
Stopping the Steal**
Red flag tagging halts buying and selling on the platform but it does not prohibit the transfer of the asset. Off-market sales can and do occur, and there is little that can be done to stop it.
The good news is that deeper analysis can be done on individual holders of the assets to determine their connection to any high-risk issues.
These accounts continue to transfer uninhibited, often on other marketplace platforms, among which there is limited communication on stolen or flagged assets.
**OpenSea is currently 11th in our NFT Marketplace Leaderboards with a score of 52.07. To put that into context, it would not feature in our Gambling Top 10 for AML controls; and is over 15 points behind the leading NFT Marketplace, Sorare.
Our Leaderboards track, score, and rank VASPs across more than 20 AML variables, showcasing how well services are responding to and dealing with financial crime risks.**
In part two we explore the mechanics behind NFT heists, and dig into the key accounts driving NFT theft._