Opensea is refunding people for getting scammed on NFTs

OpenSea, one of the leading marketplaces for selling NFTs has suffered a so-called exploit. The described exploit enabling users to purchase NFTs from users at well below floor price. NFTs with a market value of $1.1 million were purchased in this way in late January, according to a report by Elliptic. Recently, OpenSea has refunded about $1.8 million to users who suffered losses after confusion about a feature on the platform. This caused investors to unwittingly sell valuable NFTs far below market prices, according to Bloomberg.

Elliptic has identified at least five users who have exploited this loophole to purchase a minimum of twelve NFTs for much less than their market value. The purchased NFTs include offerings from the Bored Ape Yacht Club, Mutant Ape Yacht Club, Cool Cats and CyberKongz NFT families, according to the report. The exploit appears to rely on the fact that NFT owners are unaware that old marketplace listings for their NFTs are still active. Those old listings are now being used to purchase NFTs at prices chosen by the seller in the past, a much lower price than the floor price on the current market. 

OpenSea should be commended for reimbursing users who’ve been negatively affected by bad actors exploiting its marketplace, especially given that the fault does not appear to be on the side of users of its platform. Trust needs to be clear far more so that artists and creatives trust the systems which run NFTs. Including marketplaces but also platforms for staking and showcasing NFTs, the more that everyday people will feel confident in using these platforms to, in turn, support the digital art of these artists and creatives.

In a blog post, OpenSea exec Alex Atallah wrote that while the issue has been discussed as an “exploit” or a “bug”, “the reality is that it’s a fundamental feature of blockchain marketplaces: only the person who lists an item for sale can cancel that listing.”