OpenSea users raise concern after platform blacklists $27M worth of NFTs

OpenSea, a leading marketplace for non-fungible tokens, has blacklisted NFTs worth more than $27 million. These NFTs include top collections such as Azuki, Bored Ape Yacht Club (BAYC), CloneX, Moonbirds, and Mutant Ape Yacht Club (MAYC).

OpenSea blacklists $27M NFTs

Data provided by Dune Analytics shows that top NFT collections on OpenSea had been labeled stolen or involved in suspicious activity. The total floor price of the NFTs blacklisted by the marketplace is 24,000 ETH, worth around $27 million.

These NFTs are blacklisted on the OpenSea website to prevent them from being traded when they have been reported stolen. While the marketplace does this to protect the actual owners of these NFTs from suffering losses, there have been complaints of OpenSea failing to investigate thoroughly before blacklisting NFTs.

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One of the complaints is that anyone can report that their NFT was stolen, which may not be the case. Moreover, OpenSea delays blacklisting stolen NFTs, which causes losses for the buyers of such pieces.

Several buyers have demanded answers from OpenSea for blacklisting collections after they have already been purchased. Attempts to have these pieces removed from the blacklist are usually futile. Therefore, marketplace users want OpenSea to provide transparency on the factors they use to determine that an NFT has been stolen.

OpenSea boasts the largest NFT trading volumes compared to any other marketplace. Therefore, NFTs that have been blacklisted on OpenSea tend to be blacklisted on other smaller marketplaces such as x2y2. However, LooksRare, another top NFT trading platform, does not usually follow OpenSea’s blacklisting, and items blacklisted on OpenSea can be sold on LooksRare.

Security issues

NFTs have recorded an uptick in theft and scams over the past year due to their growing popularity. While some NFTs are stolen directly from the owners, there have been instances when breaches on OpenSea have caused losses to users.

In June, OpenSea acknowledged a data breach that would expose users to an email phishing campaign. The platform alerted all users who had submitted their email addresses to look out for phishing attempts.

A month before this breach, the Discord channel of OpenSea was also breached. The hackers behind this breach duped unsuspecting users into participating in a fake NFT mint. This triggered massive losses for some users. Despite these vulnerabilities, OpenSea remains the leading platform for NFT trading.

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