OpenSea is piloting a new security feature that will auto-detect malicious activity and freeze stolen NFTs, according to a blog announcement the NFT marketplace published on Wednesday.
OpenSea unveils tool to prevent NFT theft
According to OpenSea, the pilot for the new system targets real-time detection of potential NFT theft cases. The feature will not just be able to flag the suspicious transaction, but prevent any further resales of the flagged items on the platform.
The system will disable resales for suspected theft items and use a yellow icon to mark it to alert users. The previous user will also receive instant notification over the same via email, with two possible actions being to either confirm the item is stolen or state that it’s legitimate.
In the case of the latter, OpenSea will unfreeze resales and allow transactions to continue. If the anti-theft tool flags an item and a previous owner fails to respond, OpenSea will re-enable resales of the item after seven days.
Devin Finzer, the co-founder and CEO of OpenSea noted in a tweet that the platform’s launch of the tool comes as his company tries to tackle the issue of theft of digital collectibles across the Web3 ecosystem.
OpenSea is therefore looking to partner other providers, including top marketplaces and wallets in the quest for “a holistic scam detection and prevention system.”
The digital collectibles and Web3 space have seen tremendous growth over the past two years, with more people (including top celebrities) buying NFTs amid integration across multiple ecosystems. However, that has also come with increased cases of theft.
Blockchain analytics firm Elliptic released a report that showed 4,600 NFTs were stolen in July 2022, the month with the highest publicly reported theft cases. Overall, the research showed NFTS worth over $100 million was lost to scammers and other bad actors between June 2021 and July 2022.