OpenSea Bug Sees at Least $1 Million of NFTs Sold Below Market Price

A bug in the largest NFT marketplace, OpenSea, allowed attackers to purchase at least $1 million (roughly Rs. 7.4 crore) worth of NFTs across multiple different wallets for significantly below market price, blockchain analytics firm Elliptic said on Monday.

A non-fungible token (NFT) is a form of cryptocurrency asset, which records the ownership status of digital files on blockchain. OpenSea is the largest marketplace for speculators and enthusiasts to trade their NFTs, with $4.8 billion (roughly Rs. 35,870 crore) worth of sales volume so far in January.

But a flaw in the marketplace allowed users to buy certain NFTs at prices which they had been listed for in the past, without the owner realising that they were still on sale.

OpenSea did not immediately respond to a request for comment.

"The exploit appears to come from the fact that it was previously possible to re-list an NFT at a new price, without cancelling the previous listing," said Tom Robinson, chief scientist and co-founder at Elliptic.

"Those old listings are now being used to buy NFTs at prices specified in the past - often well below current market prices."

For example, an NFT of a cartoon ape from the Bored Ape Yacht Club collection, Bored Ape #9991, was bought for 0.77 of the cryptocurrency ether (around $1,747 (roughly Rs. 1.3 lakh)) on Monday, despite the fact that such NFTs usually fetch hundreds of thousands of dollars.

Bored Ape Yacht Club is a set of 10,000 algorithmically generated cartoon ape NFTs made by the US -based company Yuga Labs.

The NFT's original owner, who identified themselves on Twitter as "TBALLER.eth" (@T_BALLER6), tweeted their shock at the transaction, which they said they did not authorise:

"Yooo guys! Idk what just happened by why did my ape just sell for .77?????"

"I didn't list me ape at all…. Now I'm seeing DMs it sold for .77?????? Wtf??????"

Elliptic's Robinson said that he had identified eight NFTs stolen in this way so far, from eight different wallets, by three attacker wallets.

One person paid a total of $133,000 (roughly Rs. 99 lakh) for seven NFTs by exploiting the bug, before then quickly selling them on for $934,000 (roughly Rs. 7 crore), Robinson said.

He noted that while crypto wallets are usually anonymous, it may be possible for the attackers to be identified if they use an exchange to cash out into fiat currency.

As celebrities, investors, and top brands flock to the NFT market - where sales volumes and prices of some sought-after NFTs have seen eye-watering growth - the OpenSea bug may give some buyers reason to pause.

OpenSea was founded in 2017 and was recently valued at $13.3 billion (roughly Rs. 99,400 crore) in its latest round of venture funding.

Elliptic data shows that since 2020, $2 billion (roughly Rs. 14,945 crore) has been stolen from users of decentralised finance (DeFi) through hacks.

"It's not common to see marketplace-wide exploits. We do see individual users being hacked and having their NFTs stolen, for example through phishing attacks, but it's not common to see something that affects potentially the entire marketplace," Robinson added.

© Thomson Reuters 2022

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