OpenSea Blacklists Top NFT Collections Worth $27M

As shown by data from Dune Analytics, OpenSea, the world’s top platform for non-fungible tokens, recently blacklisted a handful of big-name collections. Altogether, the marked collectibles are worth roughly $27 million.

OpenSea Flags Tokens

Late  Thursday, an on-chain sleuth called beetle put up a dashboard on Dune outlining relevant information regarding the blacklist. Indeed, the list featured the Bored Ape Yacht Club as well as offshoots Mutant Apes and the Bored Ape Kennel Club. Other marked projects include CloneX, Azuki, and Moonbirds.

According to Beetle, when an OpenSea user reports an NFT as stolen, the platform blacklists it; it marks it as suspicious. OpenSea also blocks the potential sale of the marked asset on their website. Unfortunately, in recent times more users have begun raising questions about how OpenSea deals with its influx of theft reports.

To begin with, many users allege the platform randomly flags reported non-fungible tokens without properly delving into the issue. Due to this, just about anyone could file a complaint and elicit an official response. This ties into another supposed flaw, OpenSea’s delayed reaction time.

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Disgruntled Users Pile Up

Users claim the platform takes action and flags an asset too long after the theft has occurred. Indeed, complaints say this is unfair to unsuspecting buyers of marked NFTs. A prime example of this took place earlier this month after a Twitter user called the platform’s attention to one such situation.

Eighty-eight days after the transaction had occurred, OpenSea tagged the token in question, a CloneX, as suspicious. Following this, the buyer @Jennifer19375 called the NFT marketplace out on Twitter:

You owe me an explanation @opensea,” the tweet concluded. 

Other affected users chimed in saying they had tried to get OpenSea to remove their tokens from the blacklist. Beetle’s dashboard also highlighted the effect of the flagging process on the projects themselves. OpenSea has frozen 1.5% of the Azuki supply in half a year and marked 70 moonbirds in under 3 months.

OpenSea Facing Security Issues

Overall, we can trace the issue back to the NFT industry’s security problem with breaches and scams. OpenSea has fallen victim to attacks in the past and even recently broadcast a warning. The platform notified users of a potential email phishing scam after they had experienced a breach.

Users who had shared their email addresses with the platform at some point were in the red zone. OpenSea stated that they were working with their customer support division to investigate the matter. They also filed a report with law enforcement and encouraged users to remain alert.

In May, hackers took over the company’s Discord, for the second time, to push a fake NFT mint to members of the community. Despite these events, users believe the NFT marketplace should be able to handle things better. One suggestion for OpenSea is greater transparency during the flagging process.

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Notably, while some platforms such as x2y2 comply with OpenSea’s blacklist, others like LooksRare do not. Users can sell flagged non-fungible tokens on the marketplace, a phenomenon that has occurred repeatedly.