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OpenSea’s Stolen Item Policy Reveals a Stubborn Problem

The Web3 world is doing its best to come up with a solution to one of these problems. The Biggest Problem in the Crypto Ecosystem:theft.

More than 46,000 people have reported losing more than $1 billion to cryptocurrency scams since 2021, according to the report. A recent report released by the Federal Trade Commission (Fair Trade Commission). The problem got worse, so Regulatory and Legislative Bodies In the United States, we play the hot potato game by asking each other to help us find new solutions.

The NFT Marketplace is also working on ways to deal with theft on its platform.high seas We recently updated our swag policy, for example. In a Twitter thread explaining the update, the company commented on why it doesn’t allow the sale of stolen goods on its website, noting that this policy is consistent with US legal requirements.

This legal requirement is the source of much controversy regarding OpenSea. While trying to stay true to that law, assets that the platform recognized as stolen, wrongly or not, have effectively become dead assets on the OpenSea marketplace. The only recourse against users who were wrongfully accused or who bought her stolen NFTs without their knowledge was to take their digital assets to another platform and sell or trade them there. Not an ideal solution.

In a Twitter thread, OpenSea admitted that it occasionally penalized buyers on its platform who bought stolen NFTs in this way without their knowledge.

“Based on your opinion,” the company continued. in a thread“We have already made calls to reconcile elements of how the policy is implemented. First, we are expanding how we use police reports. I will use it to verify all theft reports from now on.”

The company says it will resume selling items on its platform if users do not file a police report within seven days of submitting a ticket reporting the theft of an NFT. The update will also allow NFT owners to more easily transact with previously stolen assets as the platform helps recover stolen assets. In both fraudulently labeled theft and successful asset recovery situations, the company is working to develop a process that does not require a notary.

What this means for the ongoing NFT theft crisis

OpenSea does not have a complete track record of handling stolen NFTs on its platform. User provesReactions to the announcement of the stolen goods policy have been mixed, with some arguing that this is probably the best bet. Massive NFT platform It is possible by trying to adhere to certain legal realities.

Others range from skeptical, not convinced that OpenSea is sincere about its desire to do the right thing by its community. outright poignant.

To be fair, that skepticism is not entirely unfounded. Numerous scandals have rocked the platform in recent months, and have shaken users’ trust to the core. In June, the FBI Former OpenSea product manager indicted in insider trading. A month later, the company said it was lay off 20% of the staffraises the question of whether the platform acted responsibly in its plans The cyclical nature of crypto markets.

OpenSea has also demonstrated a lack of accuracy in enforcing its policies, such as when it failed to comply with US sanctions laws. Ban all Iranian artists Many of them were not legal residents of the country, but from that platform.

How expanding police reports on OpenSea can help

Requiring a police report for all items stolen on OpenSea could have significant downstream effects, such as reducing the number of unjustified accusations the user base has to deal with. It helps discourage false reports.

The policy update works in OpenSea’s favour, allowing it to legally comply with the necessary regulations, while making the market claim that due diligence was taken to address the issue.

It’s all very nasty, and no one is thrilled with the widespread NFT theft and proposed solutions on the platform.Security across Web3 is a slippery, multifaceted thing to consider. . For example, Ethereum co-founder Vitalik Buterin recently ERC-721 Token Stealth Address As a way to allow users to transfer, create and write NFTs anonymously, soul bound token– Worlds to use.

However, these addresses can benefit bad actors in this space, making recovery of stolen assets nearly impossible.use social recovery wallet We may reduce that chance, but it’s not a guarantee. Anyway, OpenSea’s update to its stolen policy is an example of how difficult it is to deal with the other side of decentralized coins in the Web3 world.

It shouldn’t be too surprising that scams on Web3 are common. Due to the nature of DeFi, there are far more ways for people to transact online. Yet the very foundation of that freedom can also be exploited by malicious actors. The months and years ahead will likely see increasingly serious and creative attempts to balance decentralization with security and a sense of justice—the symmetry his NFT space desperately needs. There is a nature.

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