NFTs are the hottest commodity for digital artists, celebrities, collectors — and now, art thieves.
Michael Miraflor, a marketing and media strategist, had been collecting NFTs along with the recent crypto art boom. He hadn’t run into any roadblocks until this past weekend, when someone hacked into his Nifty Gateway account and robbed tens of thousands of dollars.
“Someone stole my NFTs today on @niftygateway and purchased $10K++ worth of today's drop without my knowledge,” he tweeted yesterday. “NFTs were then transferred to another account.”
NFTs, or non-fungible tokens, are taking over the art market. In fact, digital artist Beeple, who just sold the most valuable NFT to date for $69 million, is the third most valuable living artist. But as the value of NFTs has soared, so has theft. While some users have swiped tweets to sell them as NFTs, hackers are now outright stealing previously purchased NFTs directly from buyers.
Miraflor followed his tweet with a thread outlining his wild goose chase, trying to track down his money and the person responsible for the blockchain heist. It started when Nifty Gateway, Miraflor’s NFT marketplace of choice, notified him that he had made a sale. He immediately noticed something was wrong when he logged in and saw an empty account.
After freezing his credit cards and changing his Nifty Gateway password, Miraflor tracked down the two accounts where his NFTs were sent. Although he didn’t reveal the accounts in the Twitter thread, Miraflor wrote that one housed hundreds of NFTs and “might be housing other people's stolen property,” while the other account was completely empty.
“Crossing fingers that I fully recover my NFTs and that my situation can be used as a case study on best practices and security moving forward — for everyone in the community,” Miraflor wrote in the thread.
Nifty Gateway co-founder Griffin Cock Foster (who we interviewed last June) even reached out directly to offer his support. Unfortunately, even after filing a police report and confirming that fraud had indeed taken place, there was no way for his NFTs to be returned to him, although his cash was recovered. Nifty Gateway confirmed that the hackers found buyers for the NFTs on Discord, and that the company knows who was involved.
“Hacker wins,” he wrote. “Secondary market purchaser wins. I lose. Going to explore other options if I can. Doesn’t sit right with me.”
Miraflor isn't the only one getting scammed. In his thread, Miraflor quoted tweets from two collectors who had also been robbed over the weekend.
“My entire account was just hacked and the person who got in wasn’t even booted after changing my password?! What in the f is going on?!” a Twitter user named Lt. Crandog wrote.
“Someone hacked my @niftygateway account tonight and used my credit card attached to the account to buy like $20k worth of art... cool,” a user known as Keyboard Monkey posted.
Miraflor’s stolen NFTs were originally created by MLB pro-turned-artist Micah Johnson, whose work is gaining notoriety in the crypto community. Johnson recently sold $1 million worth of NFTs in one minute. Miraflor also notified Johnson about the theft in the thread. (We reached out to both Miraflor and Johnson for comment, but have yet to hear back.)
This hack-and-heist is yet another way you can get scammed in the burgeoning NFT market. As previously mentioned, people are hiding behind anonymous Twitter accounts and stealing from artists by tweeting their work and selling the tweet as an NFT. There have also been countless cases of people forgetting their passwords and losing thousands in ETH.
Nifty Gateway knows exactly who committed the fraud, but thanks to a few loopholes, the hackers managed to pull off their heist legally. While NFTs may be booming, the tokenized art world is still in its infancy, which means hackers can find a way to make thousands with little to no regulation.