What To Know About NFT Theft & Plagiarism

NFTs have become extremely popular, both as investment vehicles and novelties. While their existence has led to a new realm of assets, it has also opened the door for those assets to be stolen and plagiarized. As with anything high-profile and hosted on the blockchain, NFTs are particularly prone to theft and plagiarism. 

This may very well be an asset class you and other verified accredited investors are interested in participating in, so it’s essential to understand the potential risks.

NFTs are Vulnerable

Scams involving NFTs are rampant. In one monumental heist on the eve of 2022, 615 Ethereum (ETH) worth of NFTs were stolen from the owner of the Chelsea Art Gallery. That’s approximately $2.3 million USD worth of NFTs. This, however, is not the only and not nearly the largest theft in the short history of NFTs.

Because NFTs are hosted on the blockchain, hackers can gain access to the file codes, list, and sell the NFTs, all without the purchaser or purchasing platform having any idea that the NFTs are stolen property. While some of the largest NFT markets are making efforts to protect their users from theft, there is currently no overarching regulation that ensures everyone is protected.   

Plagiarism is another rampant problem with NFTs. Copies exist all over the NFT marketplace, and it’s incredibly difficult to distinguish original work from plagiarized work. The problem for investors arises when the buyer unknowingly purchases an NFT that is a copy of copyrighted work. If later sold, the investor could be subject to damages in the tens of thousands of dollars USD.

Protecting Your Investments

Blockchain is largely decentralized in nature, which makes theft and plagiarism far more difficult to police. The responsibility to protect your NFTs is thus, of paramount importance. As if they do become stolen, there’s no guarantee that you’ll retrieve them. Additionally, it’s your responsibility to understand what rights you will own when you invest in an NFT, and to know whether you’re purchasing plagiarized work.

To protect your NFTs from theft, it’s important to store them in an offline wallet. While digital wallets hosted on platforms like OpenSea are easy and convenient, they leave you vulnerable to theft. Instead, use cold storage to enhance the security of your NFTs.

To protect yourself from purchasing copyrighted work, thoroughly research the artist you’re purchasing from and scour the internet for similar projects. Of course, many scams are difficult to spot. This is an inherent risk it’s important to be aware of with any investment into NFTs.

Whether NFTs are for you or not, understanding the pros and pitfalls of this popular investment vehicle is the role of a savvy investor. Instead of or in addition to investing in NFTs, if you’re eager to participate in off-market opportunities, consider whether you meet the accredited investor criteria. Becoming an accredited investor can open up a world of opportunities beyond NFTs that are unavailable to many other investors. Follow our guide to learn how to provide proof of assets to become one today.