BAYC Hack & China’s First Big NFT Lawsuit
Ape owners got phished, and a Chinese court rules marketplaces are liable for copyright claims
Cultured is a newsletter that gets readers up to speed on the most interesting things going on at the intersection of finance, art, collectibles, NFTs, and more. Cultured is produced by Otis, an alternative investment platform that was recently acquired by Public.com.
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🗞 STORIES OF THE DAY
Hackers stole at least $1 million worth of BAYC NFTs in a phishing attempt
Several very unlucky BAYC owners lost their Apes in a phishing attack early this week. Hackers broke into the BAYC Instagram account and posted a fake airdrop notification. When users linked their wallets, the hackers then transferred the tokens out.
Screenshots show the hacker’s OpenSea account, which showed it had received at least a dozen Apes and Mutant Apes. OpenSea banned the account, but the hacker still has the Apes, which are worth at least $1 million.
The decision to use Instagram was a smart choice, since MetaMask only supports NFT displays on mobile. By posting the link on Insta, hackers knew they’d have a higher chance of stealing NFTs from the owners.
Our Take: The latest spree of NFT hacks point to growing security issues.
BAYC is far from the only NFT project to face these kind of phishing attacks. Shortly after they were released, Moonbirds were subject to a similar phishing attack. Another attack in February saw scammers pull 250 NFTs from OpenSea accounts. As these tokens grow in value, it’s increasingly important to create security systems that can prevent phishing attacks.
China’s first court ruling on NFTs has major impacts on marketplaces
A court in China handed down the country’s first ruling about NFTs. The suit involved a token sold on NFTCN, a major NFT marketplace, that featured a cartoon by Ma Qianli. The court found the marketplace guilty of illegally disseminating copyrighted material.
The court said that NFTCN — not the user who sold the token — was liable. That’s because the marketplace failed to adequately check ownership of the image attached to the NFT and ordered it to burn the token.
China has taken a cautious stance on NFTs since they exploded in popularity last year. The country has issued warnings against the tokens and has banned financial institutions from issuing or facilitating transfers of NFTs.
Our Take: China’s decision will have wide-ranging impacts on the way NFT marketplaces operate in the country.
This case sets a precedent in China of holding marketplaces responsible for illegal actions on their platforms, since the companies benefit financially from the transactions. Unlike the US, which protects platforms from the legal ramifications of content posted by users, the new ruling means that China’s marketplaces aren’t protected from similar safe harbor rules. This could cause marketplaces to think twice about expanding into the country, or limit their operations.
✨ AROUND THE INTERNET
Climate change has made it much, much more expensive to insure your art and collectibles. Here’s why.
The only known surviving set of proof sheets from the first Harry Potter book are going up for auction. They’re expected to fetch around $25,000.
Gem, a major NFT aggregator, has been acquired by OpenSea. This happened just weeks after the company removed one of its co-founders for sexual harassment.
Logan Paul breaks down the risky move he took that led to him finding a $1 million Charizard card.
A new report found that more than 80% of NFT buyers are in it for the money. Read more here.
Check out these sick Jordan Luka 1s, the first collab between the iconic sneaker brand and Mavs player Luka Dončić.painting.
