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OpenSea Reimburses $1.8 Million to Scammed Users, Warns That 80% of NFTs on the Marketplace Are Fraudulent

Published 01/31/2022, 01:00 PM
Updated 01/31/2022, 01:30 PM
OpenSea Reimburses $1.8 Million to Scammed Users, Warns That 80% of NFTs on the Marketplace Are Fraudulent

The largest NFT marketplace in the sector, OpenSea, has reimbursed around $1.8 million (750 ETH for 130 wallets) to users who experienced significant losses as a result of the platform’s broken mechanism causing the accidental sales of expensive NFTs at very low prices.

Last week, some popular NFTs, such as from the Bored Ape Yacht Club, Mutant Ape Yacht Club, Cyberkongz, and Cool Cats collections, were purchased for extremely reduced prices without the sellers’ permission or knowledge. The NFTs in question were then resold at much higher prices.

For instance, one user noticed that his ape was sold for 0.77 ETH, while the current floor price of the BAYC NFTs is 116.9 ETH.

The issue was discussed as an ‘exploit’ or ‘bug,’ and OpenSea implemented a few solutions:

1. Changed the default listing duration on our site from 6 months to 1 month to limit the number of listings that remain active long after they’re relevant.

2. Built a dashboard into the user profile where a user can see all of their listings and cancel any that are no longer relevant.

3. Created an alert to flag when a user transfers an NFT out of their wallet that has an active listing associated with it, so they are made aware and can cancel the listing upon transferring the item.

OpenSea also revealed that most NFTs minted for free on the platform are spam and/ or plagiarism. OpenSea allows creators to mint NFTs without fees, leaving the buyer to pay the gas fee instead. However, the platform has since remarked that the majority of NFTs minted in this way are almost exclusively spam. The company tweeted:

"Every decision we make, we make with our creators in mind. We originally built our shared storefront contract to make it easy for creators to onboard into the space.

However, we've recently seen misuse of this feature increase exponentially. Over 80% of the items created with this tool were plagiarized works, fake collections, and spam.”

On the Flipside

  • Even with the occurrence of such serious issues and scams, the NFT boom has shown no signs of stopping, with high sales numbers and celebrities showing a lot of interest in the market. A few days ago, Justin Bieber bought a Bored Ape NFT for 500 ETH (around $1.29 million) on OpenSea.

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