NFT Theft: OpenSea Updates Policy to Tackle NFT Fraud and Theft

by
Blockchain
NFT Theft: OpenSea Updates Policy to Tackle NFT Fraud and Theft

OpenSea non-fungible tokens (NFTs) and digital collectibles marketplace has updated its policy in a bid to combat the sale of stolen NFTs on the platform. The new policy requires OpenSea users to submit a police report within seven days of losing their NFTs.

OpenSea NFT Policy Update 

OpenSea, the world’s leading non-fungible tokens (NFT) and digital collectibles marketplace, has introduced a new clause in its user policy, in a bid to tackle the issue of scams and NFT theft on its platform.

The issue of NFT theft and scams has been on the rise in recent times and a good number of OpenSea users have fallen victim to these dark practices, losing millions of dollars to bad actors.

In a Twitter thread posted on August 10, 2022, the OpenSea team reiterated that while its policy is designed to function in the best interest of its community, the rules have adversely affected some users, damaging their trust in the platform.

“Our policy is designed to keep our community safe, but we know in some cases its side effects have damaged your trust in our platform. We’ve failed to proactively and transparently communicate the rationale behind our approach. We’re in this together: as we work to make our users safer, it’s on us to keep you in the know,” the team tweeted.

Police Report Mandatory 

OpenSea says its policy is crafted in accordance with US laws, which prohibit the sale of stolen items. As part of the new OpenSea scam elimination measures, the platform has now expanded the scope of police reports in its ecosystem. 

While police reports were only used in escalated disputes on OpenSea previously, users whose NFTs get stolen on the platform are now required to obtain and submit a police report within seven days of the incident.

“For all reports going forward, if we don’t receive a police report within seven days, we’ll re-enable buying and selling for the reported item. This change will help prevent false reports. We think this is a good first step and we’re grateful for the community.” it added.

What’s more, the team has also made it clear that it’s working on a new measure that will make it possible for users who reported an item stolen to re-enable buying and selling without getting a letter from a notary public. 

The team has also hinted that it’s working with other players in the blockchain ecosystem to disincentivize and prevent theft, as well as other illicit practices on the platform.

As reported by crypto.news earlier in June 2022, Nathaniel Chastain, the former Head of Product at OpenSea got indicted for conducting insider trading, wire fraud, and other illegal practices on OpenSea.

While NFT trading volumes have crashed drastically this year, more and more brands have continued to latch onto the digital collectibles movement. 

Electronics giant Samsung recently announced that it is now rewarding buyers of its premium smartphones with NFTs.

Ogwu Osaemezu Emmanuel

Ogwu Osaemezu Emmanuel is a graduate of Mass Communication and Media Studies. He joined the blockchain movement in 2016 when a friend of his introduced him to an investment platform accepting bitcoin. He has never looked back since then. Emmanuel believes the world needs real change and freedom from poverty. He sees crypto and the underlying distributed ledger technology as the catalyst to a better future for all.