In 2022, IDR 1.4 Trillion NFT Theft Occurs, The Biggest In July

JAKARTA - Blockchain research firm Elliptic announced on Wednesday, August 24, that the theft of non-fungible tokens worth more than 100 million US dollars (IDR 1.4 trillion) had occurred as of July this year. This digital asset emerged quickly and became a new front in the crypto hacking problem.

NFTs are blockchain-based assets that represent digital files such as images, videos or text. The NFT market is soaring in 2021 as crypto-rich speculators spend billions of dollars on the asset. They hope to make a profit because of rising prices. But since the price of cryptocurrencies fell in May and June to this year, the price of NFTs and their sales volumes have also fallen.

London-based Elliptic said scams also remain rife in the NFT market even as prices decline. Last July was the time for the highest NFT theft of the year.

Security compromises via social media have also spiked. In fact, accounting for 23% of the NFT theft that occurred in 2022 from this sector.

"Thieves receive an average of USD 300.000 (IDR 4.4 billion) per fraud," Elliptic said, as quoted by Reuters. "The true scale of NFT theft is likely to be higher, given that not all crimes are publicly reported."

Hacking and fraud have long plagued the crypto industry, while regulators around the world are increasingly concerned about the use of crypto assets in cybercrimes.

Elliptic puts the amount of money laundering on the NFT-based platform at just 8 million US dollars. But nearly $329 million worth of funds in the NFT market come from services such as the so-called cryptocurrency mixer, which is designed to hide the origin of the funds.

“One of those mixers, Tornado Cash, was used to launder more than half of the proceeds from the NFT scam,” said Elliptic.

"There is a growing threat to NFT-based services from sanctioned entities and state-sponsored exploits," Elliptic said, citing the theft of $540 million in April that US officials have linked to North Korea's Lazarus Group.