The digital marketplace for NFTs grew to an estimated $22bn last year but companies face challenges monitoring stolen art
OpenSea has grown at a dizzying pace, and is now valued at $13bn. But amid its spectacular rise, the company is doing far too little to prevent thefraudulent NFTs, some artists charge, and is placing much of the burden of policing art fraud on the artists themselves.
“It is much easier to make forgeries in the blockchain space than in the traditional art world. It’s as simple as right-click, save,” said Tina Rivers Ryan, a curator and expert in digital art at the Albright-Knox gallery in Buffalo, New York. “It’s also harder to fight forgers. How do you sue the anonymous holder of a crypto wallet? In which jurisdiction?”
In December, bots began attacking the site, Moti Levy, DeviantArt’s chief operations officer said, scraping whole galleries of artists’ works. The pieces would later appear on NFT marketplaces, often with artists’ names and watermarks still attached. The recourse she has as the legitimate creator of the work, she said, is to write individual copyright infringement takedown requests to OpenSea and to manually monitor for new fraudulent listings – all time-consuming work.
The kind of fraud artists were complaining about made up only a small fraction of its transactions, OpenSea said. It took enforcement action on 3,500 collections of NFTs every week for counterfeit or copyright reasons, it said, which represents 0.175% of the platform’s more than 2m total collections. It said the site now lists more than 80m individual NFTs.
The current reporting process for artists whose stolen work is turned into NFTs is confusing and laborious, confirmed Ashli Weiss, a Silicon Valley lawyer who specializes in intellectual property and works with blockchain companies, adding that there is currently little incentive for OpenSea and other marketplaces to fix the problem. “OpenSea is getting paid with each transaction.”
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