Is Open Sea doing enough to combat NFT fraud?

The Guardian | Lois Beckett | Jan 29, 2022

The digital marketplace for NFTs grew to an estimated $22bn last year but companies face challenges monitoring stolen art

Van Baarle is a popular digital artist, with millions of followers on social media. She’s one of a growing number of artists who have had online images of their art stolen, minted as unique digital assets on a blockchain, and offered up to trade in cryptocurrency on the NFT platform OpenSea.

The rise in such thefts comes as the market for non-fungible tokens, or NFTs, exploded last year, growing to an estimated $22bn, attracting Sotheby’s and Christie’s, and driving multimillion-dollar auctions for these new certificates of ownership of digital assets.

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OpenSea has grown at a dizzying pace, and is now valued at $13bn. But amid its spectacular rise, the company is doing far too little to prevent the trade in fraudulent NFTs, some artists charge, and is placing much of the burden of policing art fraud on the artists themselves.

OpenSea said in a statement: “It is against our policy to sell NFTs using plagiarized content,” adding that it regularly delisted and banned accounts that did so. The company said it was working to build new image recognition and other tools that would quickly recognize stolen content and protect creators, and that it planned to launch some of them in the first half of this year.

A boon and nightmare for artists

“We’re in an incredible mushrooming of opportunity for digital artists,” said Schachter. “It’s 1,000% better than a year ago, two years ago, when there was no marketplace for any of this art.”

But other artists say that the past year’s crypto boom has been a nightmare. Among the problems is that anyone can “mint” a digital file as an NFT, whether or not they have rights to it in the first place, and the process is anonymous by default.

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“It is much easier to make forgeries in the blockchain space than in the traditional art world. It’s as simple as right-click, save,” said Tina Rivers Ryan, a curator and expert in digital art at the Albright-Knox gallery in Buffalo, New York. “It’s also harder to fight forgers. How do you sue the anonymous holder of a crypto wallet? In which jurisdiction?”

‘How much of their valuation is from stolen art?’

Aja Trier, a Texas-based artist who has found viral fame for painting riffs on Van Gogh’s Starry Night featuring various breeds of dog, said she discovered 87,000 NFTs based on images of her work for sale on OpenSea, many of them priced at $9.88 each.

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Trier said 500 listings of her stolen work were added in a single night, suggesting the theft was being automated and carried out by bots.

More than half of the company’s current staff works either full-time or extensively on issues of plagiarism and content moderation, OpenSea said:

[We are] developing “smart moderation” tools to speed up the company’s response to reports of plagiarism.

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