NFTArt News

The counterfeit NFT problem is only getting worse

The counterfeit NFT problem is only getting worse
Written by Publishing Team

Aja Trier is used to getting her art stolen — published without attribution, ripped off on T-shirts, and even printed on phone cases.

But when she opened her inbox on January 4, Trier was overwhelmed with alerts about her art being ripped off on an entirely new scale: her viral Vincent Van Gogh-style paintings had been turned into nearly 86,000 NFTs.

“I’ve seen other artists deal with NFT theft, but not to that extent,” Trier told The Verge. “People said that they’d never seen it at that scale.”

Trier’s work had been listed without her knowledge on OpenSea, one of the largest marketplaces to buy and sell NFTs, or non-fungible tokens. For as long as NFTs have existed, artists have complained that scammers have stolen their work and minted it on the blockchain. But artists say the problem is getting worse as platforms go on to rack up billions of dollars in sales. The same day Trier discovered her work had been ripped off, OpenSea announced it raised $300 million at a whopping $13.3 billion valuation.

Plagiarism and fraud have been an issue since NFTs exploded in early 2021, but something shifted last fall, according to NFTTheft, a collective of artists highlighting fraudulent listings. (“You follow us if you basically want to live in hell and know how bad things are,” NFTTheft’s administrator, who asked to remain anonymous due to fear of doxxing and backlash from crypto-evangelists, told The Verge.) Where before artists saw a few thefts a day — an annoying but manageable number to file takedowns for — suddenly artists were seeing dozens, hundreds, or thousands of thefts, as in Trier’s case.

The explosion appeared to be from bots scraping artists’ online galleries, or even keyword searches on Google Images, and then creating collections with auto-generated texts. Those listings have proliferated on OpenSea.

That isn’t by accident, said NFTTheft. OpenSea allows the creation of NFTs using “lazy minting,” where users list NFTs for sale without writing them to the blockchain. Sellers don’t pay fees until an NFT sells, allowing scammers to list as many stolen items as they want in the hopes of nabbing a sucker. While other marketplaces allow “lazy minting,” OpenSea’s popularity and its spotty vetting system make it an ideal place for bots to lurk.

One way artists have been tipped off about this is thanks to an older online art platform. Earlier last year, DeviantArt introduced Protect, an image recognition tool, to notify users of copyright infringement on NFT marketplaces, leading to a flood of matches.

But once artists get tipped off about the thefts, it’s up to them to get those listings removed. As Trier has done for other unauthorized uses, she started to file takedown requests under the Digital Millennium Copyright Act (DMCA) after receiving the alerts in early January. But she quickly realized it would take weeks for her to complete a separate request for each of tens of thousands of fraudulent listings, as required by OpenSea.

As artists have become more vocal thanks to Protect, OpenSea has become less responsive, NFTTheft said. In December, Lois van Baarle, a massively popular Dutch illustrator, was able to get over 100 stolen listings taken off OpenSea in 48 hours after blasting the company on Twitter. But her case is the exception. Artists with smaller followings have reported waiting weeks or even having takedowns denied.

NFTTheft has tried to help by publicly shaming the marketplaces and uncovering best practices for takedowns. In late December, an artist that reported takingdowns with Google, whose cloud service hosts images on OpenSea, was more effective than going to the marketplace directly. NFTTheft then worked with other artists to test the strategy and spread it.

“That was the brightest hope we’ve had in months,” they said.

An OpenSea spokesperson told The Verge in an email that it is against the site’s policy to sell NFTs using plagiarized content, which they enforce through delisting and banning accounts. OpenSea is “actively expanding our efforts across customer support, trust and safety, and site integrity” to improve the issue, they said.

The platform tried to take a more concerted effort toward ending the spam problem late last month. OpenSea announced it would put strict limits on its free listing tool, saying the reason was: “Over 80 percent of the items created with this tool were plagiarized works, fake collections, and spam.” NFT creators were unhappy about the change, though, and it was promptly rolled back.

The issue isn’t going away anytime soon. So Mert Hilmi Iseri, an entrepreneur-in-residence at MATH Venture Partners, wants to simplify the process of issuing takedowns. After talking to artists last month, he and two developers launched SnifflesNFT, an image recognition tool that automatically issues takedown requests for artists. The tool is already in beta testing with 20 artists.

There are steps marketplaces can take to stop ripoffs from being posted in the first place.

Rarible, another major NFT marketplace, has cut down on plagiarism by implementing a human-moderated verification system, encouraging sellers and creators to link their social media accounts and preventing NFTs from non-verified sellers from showing up in searches. Raible told The Verge that the number of users filing reports that they’d purchased fraudulent or plagiarized NFTs has dropped by 90 percent since introducing the measures in early 2021.

“It’s very hard to buy from an unverified creator on Rarible,” Alexei Falin, co-founder and CEO of Rarible, told The Verge.

However, image recognition and marketplace verification are only Band-Aids, according to Iseri. The solution, which SnifflesNFT hopes to build, is a “blockchain-scale” reputation system that verifies legitimate collectors, artists, and sellers, while penalizing scammers, regardless of the marketplace.

“[Blockchain] is a very new space and there are a lot of missing pieces,” Falin said. “A reputation system would be a good thing for the whole market, but it’s a complex problem to solve.”

Other artists are looking to a legal approach if NFT marketplaces can’t get it together. Jon Neimester, a concept artist who works on the popular video game Smite, has said he is collecting evidence for a class-action lawsuit. Concept artist RJ Palmer, who worked on Detective Pikachuis on board.

“I stopped reporting [the thefts],” Palmer said. “I want to see if they sell, because then I could prove lost income and damages in a court of law.”

A class-action lawsuit could succeed if artists can prove a platform is “encouraging and profiting from a continued and persistent practice of infringement,” according to Tonya Evans, a professor at Penn State Dickinson Law School who specializes in technology and intellectual property law. But marketplaces are protected from liability so long as they adhere to the DMCA, which can shield platforms from user-generated copyright infringement.

Artists’ best approach, Evans told The Vergeis what many are doing: notifying platforms of infringement, registering work with the US Copyright Office, and alerting the crypto community and social media of theft.

“If there’s no community support, there’s no demand and effectively no market value,” Evans said.

Trier, who grappled with the 86,000 fake listings, remains open to NFTs — she’s listed her work for sale on the invite-only marketplace Foundation. Her frustration isn’t on the format, but on OpenSea’s lack of adequate safeguards.

“OpenSea has bastardized the entirety of what NFTs are about for artists,” Trier said. “On OpenSea, it’s a Wild West.”

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Publishing Team