A police report will be required by the top marketplace for NFTs believed to have been stolen. The police are also considering additional tweaks.
NFT scams are on the rise and Web3 platforms have to deal with managing stolen assets. OpenSea is the largest NFT market, however, its policy to block flagged assets has been criticized for penalizing users who weren’t aware they were purchasing stolen NFTs.
OpenSea responded on Twitter Wednesday by announcing that it would change how it handles NFT assets reported as stolen.
OpenSea used to block the sale, purchase, and transfer of stolen assets on its platform while it investigated each case. This meant that an indefinite stop was placed on accessing NFTs and their respective value.
Twittering it said it wanted to “addressthe elephant in the room”, OpenSea stated that it would now require a police investigation within seven days after flagging an NFT stolen. Although it noted that it had done this before for “escalated dispute”, it will now require it for all NFTs reported as stolen.
This is to stop false reports. The items will be released if a police report has not been submitted on time.
OpenSea claims that it will make it easier to cancel a claim after a user has recovered their NFT or if they wish to withdraw a report.
OpenSea clarified Thursday that the requirement for a police report will only be applicable to new claims regarding stolen NFTs and not existing cases. The marketplace tweeted that “if we applied this retroactively we’d ask them months or weeks later to take an additional action, when they’d (hopefully), put this behind them.”
An NFT token is a digital token that is used to represent ownership of an item. Artwork, profile photos, digital collectibles and video games are all popular NFT uses. OpenSea, the largest NFT marketplace, processes billions in trading volume every month prior to the recent crypto-market crash.
There has been an increase in scams to trick users into signing what they think is a legitimate transaction with crypto wallet. This could be for a new NFT, token drop, or any other type of NFT. But instead, attackers have access to all assets in the signing wallet and can transfer and steal NFTs.
These scams are commonplace on social media, particularly Twitter. Accounts of reputable creators and projects, including Beeple, and Nouns, have been hacked and used for spreading links that could lead to assets being stolen. This has led to a heated debate about whether creators should compensate users who had their NFTs stolen.
OpenSea stated that it is not allowed to knowingly permit the sale of NFTs marked as stolen because it is based in the United States. The marketplace has a broad policy against blacklisting stolen assets. This means that NFT buyers who are unaware that the asset was stolen may be unable to transact on or transfer it.
Inadvertently punished in some cases: “In some instances, the purchaser who unknowingly purchased a stolen item (at their own fault) OpenSea admitted that this is one of our most challenging issues. “Please be assured that we take this seriously and we have been listening to your suggestions on how we can tackle it.”
OpenSea may block users from buying, selling, or transferring NFTs through its marketplace. However, this doesn’t stop them from transacting anywhere else. Ownered NFTs can be kept in the user’s wallets and used on other marketplaces that have different policies or have not similarly flagged these assets as stolen.
OpenSea noted that it was working with other Web3 platforms in an effort to minimize the impact on NFT scams and educate users. OpenSea pointed out the Ethereum MetaMask’s most recent update which made users more aware of the fact that they are signing away broad access rights for certain transactions–a common access to execute such attacks.
