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HomeOpenseaOpenSea Froze The Crypto Rapper’s NFTs. The Owner Wants A Refund.

OpenSea Froze The Crypto Rapper’s NFTs. The Owner Wants A Refund.

Twitter user Ethmuppet said he won “a part of the history of cryptography” when he bought two NFTs from eccentric entrepreneur Heather Morgan. Arrested with her husband Attempts to launder $ 4.5 billion in cryptocurrencies plundered on Tuesday. But after a few hours, the NFT was gone.They had Suddenly disappeared from OpenSeaThe NFT Marketplace, where Ethmuppet paid about $ 600 to own an image created by Morgan’s rap persona Razzlekhan.

Ethmuppet has not refunded to BuzzFeed News, OpenSea has not refunded, $ 13 billion company..They believe they were able to sell NFTs for huge profits — the Razzlekhan brand was subsequently from the unsuccessful criminal mastermind. Impossible anti-hero -and Listed one of the images For $ 100,000 before being removed.

“I bought something legally and fairly within the terms of their platform and contract,” Ethmuppet said via Twitter DM. “Then they decided to censor the person who put it up for sale, and made my purchase worthless.”

During the week, OpenSea was announced by the Justice Ministry.Largest financial seizure in history.. Tuesday morning, Ministry of Justice clearly Morgan and her partner Ilya Liechtenstein may have laundered hot crypts through the purchase of NFTs. Their OpenSea account went down a few hours later, BuzzFeed News reported.

A series of events evoked a series of questions. Is OpenSea under investigation? Did the DOJ seize Morgan’s NFT as evidence? Can tighter regulations in the crypto market stop future NFT laundering? And did OpenSea have the right to moderate its platform, and thus the seemingly immutable blockchain?

OpenSea did not respond to numerous requests from BuzzFeed News to answer some of these questions.But the company Told the motherboard In the statement, “We are enforcing guidelines in a variety of ways, including delisting and, in some cases, banning accounts. We are paying close attention to this.”Motherboard reported it Both NFT Purchases made by Ethmuppet can be viewed on the platform, but the transaction has been frozen and the associated images have not yet been displayed.

A DOJ spokesman declined to comment on this issue.

OpenSea’s involvement in this case is almost unprecedented. Very few cases of NFT money laundering are known. A Report Chainalysis by a blockchain analyst investigated recent activity across the NFT platform and determined that laundering was a “small but visible” component of NFT transactions. According to Chainalysis, funds moved through the NFT marketplace by “fraud-related addresses” and peaked in late 2021.

The Treasury has also flagged the NFT platform as a potential money laundering hub. In a study published this monthThe agency warned that the NFT market could eventually be forced to comply with money laundering prevention measures under the Bank Secrecy Act. These requirements, called the Know Your Customer (KYC) standard, have historically been applied to banks and financial institutions, but may require companies such as OpenSea to authenticate their identity or source of wealth.

Accountability and ownership are becoming more complex due to the continued evolution of NFTs. Technically, private NFT marketplaces are allowed to moderate their platform so that Etsy and eBay can choose to exclude offending items. However, the DOJ’s investigation raises questions about OpenSea’s role in verifying someone’s digital ownership proof.

Skeptics claim Buying an NFT through a platform like OpenSea doesn’t mean that anyone owns it. In addition, we do not transfer any specific rights under the Intellectual Property Law such as copyright. So while screenshots of NFTs purchased by Ethmuppet are floating on the internet, OpenSea has removed the ability of Ethmuppet to profit from the sale or transaction of the original image. Even in competing NFT marketplaces like LookRare, Razzlekhan NFT has been reduced to a numeric string of transaction details.

So what does this mean for OpenSea? At this point, nothing forces the company to scrutinize its customers, but regulators may change that.Some crypto exchanges KYC already implemented As a result of regulatory enforcement, some start-ups are offering KYC tools tailored to the decentralized market. However, like traditional art dealers, NFT platforms may be exempt from money laundering prevention rules. I was able to avoid these same measuresTake advantage of the narrow period set by the Bank Secrecy Act.

“This idea that something is happening through cryptography and does not fall under the same laws and regulations that exist in all other transactions is a wishful thinking by the Rivertarian Utopians,” said the SEC. Poppy Alexander, a partner at the accusation law firm Constantine Cannon, told BuzzFeed the news.

OpenSea has removed NFTs in the past because it violated our Terms of Service.society Removed NFT depicting the location of the olive garden After the restaurant chain issued a copyright removal request last year.Last year, a conservative cartoonist reportedly sold $ 1.8 million in artwork that previously included the South Army flag and MAGA images. The platform silently delisted them.. OpenSea also intervened when the user intervened Lost a total of $ 1.8 million This is due to a bug that caused Bored Ape Yacht Club and other valuable NFTs to unknowingly list at prices below market prices. The company eventually refunded an equivalent 750 ether.

Part of the crypto community, especially those whose NFTs have been tampered with, see interference from platforms like OpenSea as a betrayal of blockchain philosophy, even to combat crime. “It’s a decentralized market, [OpenSea] You need to provide tools so that the market can make all the deals on its own. Locking NFTs and accounts isn’t the right way to handle things, “said a 0x99ed Twitter user in DM. 0x99ed had an NFT worth $ 90,000 frozen by OpenSea because it was acquired and resold by a hacker.

Ethmuppet consulted a lawyer and said he believed that OpenSea’s actions were “100% illegal.”

“Money can be anything,” they added. “But that’s what artists need to know … [It’s] Surprisingly, you can whimsically turn off a collection of artists based on your actions outside of OpenSea. “

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