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February 22, 2022

Bitcoin and cryptocurrency prices, teetering on the brink of collapse in recent days due to the escalating situation in Ukraine, have suddenly moved sharply lower following news of a serious attack on the non-fungible token (NFT) platform OpenSea.

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The bitcoin price has crashed under $40,000 per bitcoin, down over 5% over the last 24 hours, while Ethereum and its rivals BNB, Solana, Cardano are down between 6% and 8%—even as the crypto market is braced for a $100 trillion earthquake.

The latest crypto price crash, which has wiped almost $300 billion from the combined crypto market over the last few days, was sparked by a series of viral tweets from panicked NFT traders, leading OpenSea to say it’s investigating "rumours of an exploit."

"As far as we can tell, this is a phishing attack," OpenSea co-founder and chief executive Devin Finzer posted to Twitter late last night. "We don’t believe it’s connected to the OpenSea website. It appears 32 users thus far have signed a malicious payload from an attacker, and some of their NFTs were stolen."

The hacker appears to have stolen roughly $3 million in NFTs, including from the popular Bored Ape Yacht Club collection that counts Paris Hilton and Jimmy Fallon as owners.

Blockchain tracking website Etherscan has added a "warning" to the hacker's Ethereum address, cautioning that "there are reports that this address was used in an OpenSea phishing scam." Phishing scams try to trick users into clicking links or downloading software that attackers then use to access victims accounts or data.

"I don’t see how OpenSea survives this mess," David Gokhshtein, Bored Ape Yacht Club NFT owner and founder of blockchain and lifestyle media company Gokhshtein Media, posted to Twitter.

OpenSea, counting venture capital giant Andreessen Horowitz and actor Ashton Kutcher as backers, is one of the largest NFT trading platforms and was recently valued at a staggering $13 billion after NFT sales volume soared to $25 billion in 2021, according to data from DappRadar.

NFTs are blockchain-based digital tokens that can be used as certificates of authenticity or proof of ownership. The NFT market is largely based on the Ethereum blockchain despite high fees and network congestion causing problems for users.

The huge growth in NFTs, which have been embraced by the worlds of sport, music and art, have helped the Ethereum price to outpace bitcoin over the last year, while Ethereum rivals BNB, Solana, Cardano have also surged as investors bet they could win market share from the incumbent Ethereum.

SOURCE: Forbes