What do today’s NFT and the Bitcoin of a decade ago have in common? Kraken cryptocurrency exchange spokesperson answers
Trading volumes in unique tokens have fallen 98 per cent since the start of this year. But the NFT trend is too early to write off: Non-exchangeable tokens could become as disruptive as Bitcoin was a decade ago. That is the view of Jonathon Miller, managing director of cryptocurrency exchange Kraken in Australia. According to him, the adoption of the NFT sphere is growing, and in the long run it will become much more popular even at the institutional level, i.e. among professional investors.
What will happen to NFT in the future
In an interview with news outlet Cointelegraph, Miller said that the cryptocurrency exchange expects the NFT sphere to grow in the long term. He believes the concept will be “as innovative as Bitcoin was a decade ago.” Moreover, Miller is particularly intrigued by the involvement of big financial brands like JPMorgan in the sphere, as well as the news that “the Vatican has opened its own NFT gallery”.
Jonathon Miller, managing director of cryptocurrency exchange Kraken in Australia
However, the head of Kraken Australia admits that there are still quite a few obstacles in the way of unique token fans. Chief among them is a “terrible user experience” that hinders attracting new investors. It’s sometimes difficult to explain the intricacies of working with a cryptocurrency wallet to digital and collectible enthusiasts. Kraken’s priority is to make the process as easy as possible, even for the novice user.
Note that it's easy to interact with the Solana-based Phantom wallet - and that includes NFT. We have published a guide on how to use it and how to test it in practice in a separate article.
CEO and founder of gaming platform Balthazar DAO John Stephanides also believes in the huge potential of unique tokens. In an interview with journalists, he said that people just need to understand – NFTs are more than just blockchain-linked pictures.
As the field of NFT develops, the problems of unique token fraud will become more acute. In doing so, brands that issue unique tokens should be a major force in the fight against fraud. This statement was made the day before by BrandShield head Yoav Keren. Of course, trading platforms for NFTs have to do their part too, but it’s the issuers that can most effectively fight scams.
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In this context, we’re talking about all sorts of phishing attacks in which the victim is “slipped” a malicious link under the pretext of winning a prize in the form of an NFT popular collection. A true collection token issuer should do everything it can to combat such incidents. Here’s Keren’s quote on the subject.
Brands must understand the legal implications of misuse of their image and take steps to protect their customers across all platforms, sites and trading venues.
Top 5 NFT trading platforms
Fraud also involves dealing in fake NFTs, often sold at a price that is attractive to the victim. The context of copyright infringement is also important here – an additional factor in blaming the perpetrators. Unfortunately, this often happens on major marketplaces like OpenSea, Rarible and Nifty Gateway, Keren noted.
We scanned OpenSea and found 41,500 suspicious posts about fake NFT sales associated with famous celebrities promoting unique tokens or cryptocurrencies.
One way to eradicate fraud is for platforms to encourage more posts about fake tokens - though crypto-enthusiasts themselves need to be more involved. In doing so, implementing a variety of programs and campaigns with rewards for fake NFTs could be beneficial to both ordinary users and platforms.
It should be noted that the activity of scammers in this area really does not subside. A day ago, five suspects in France were charged with stealing $2.5 million worth of unique tokens from some popular series including Bored Ape Yacht Club and Mutant Ape Yacht Club. Local law enforcement authorities claim that NFTs were stolen through phishing attacks – victims were lured to fake websites with the promise of animated tokens, but instead simply clicked on malicious links and lost assets.
How NFT tokens are stolen
The charges against the suspects include “fraud committed as part of a criminal group, creation of a criminal group and concealment of fraud”. The token thefts took place between late 2021 and the first half of 2022, with the suspects themselves living in Paris as well as in the French cities of Caen and Tours. According to Decrypt, two suspects – alleged ringleaders – were taken into custody pending trial. Most interestingly, the parent of one of the accused was also arrested, but has now been released without charge.
Some of the NFT stolen by the crook
Christophe Durand, deputy head of the French cybercrime unit OCLCTIC, said the investigation was initiated by a popular cryptocurrency enthusiast under the nickname ZachXBT. He had earlier published his own investigation on his blog on Twitter, in which he examined the theft of NFT from an investor under the nickname Dilly Dilly. He lost his NFT after clicking on a malicious link from a verified member of the Bored Ape Yacht Club community on Discord.
Dilly Dilly’s tweet about the scammer
ZachXBT claims that the accused then used the currently sanctioned Tornado Cash protocol to try to cover his tracks and sell the stolen NFT on the OpenSea platform. The fact that he was a confirmed member of the BAYC community on Discord is also an interesting detail. This is an important point, as series token holders with exclusive access to the server have previously complained of fraud.
Fake scam website
Unfortunately, NFT fraud is still a hot issue, even despite the general decline in the popularity of unique tokens. According to analyst firm Elliptic, the amount of damage from stolen NFTs has already surpassed the $100 million mark between July 2021 and July 2022.
Another victim of NFT fraud
Phishing attacks – the distribution of malicious links and files that drain the cryptocurrency wallets of victims – remain the main method of attackers. Countering them is possible, but it requires active promotion of elementary rules of cyber hygiene. Unfortunately, these are often unknown even to those who own millions of dollars in NFT.
We believe that the NFT industry is indeed awaiting not only new heights of popularity, but also options for application. Obviously, they will be especially active during the next bull run, which will come after the global economy has stabilised. In the meantime, developers will continue to make efforts to develop this area.
What do you think about it? Share your opinion on it in our millionaires’ crypto chat.
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