How Do You Prevent NFT Theft? Here’s What Experts Say
Written by
Dawn Allcot
Edited by
Susan Kim
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As non-fungible tokens grow in value and popularity, they have become a target for hackers and cyber thieves. Just as artwork in the real world can be stolen — and the most valuable pieces are kept under strict guard in museums — you’ll need to take steps to protect your pricey NFTs in the metaverse.
It’s not very easy to steal a piece of art in the real world. After all, even if you got past the armed guards in the Louvre, you’d look quite conspicuous carrying the Mona Lisa down the streets of Paris. However, since many NFTs can be easily duplicated by clicking and saving the image, it’s not so easy to prevent theft — or enforce the law when thieves steal NFTs.
How Buyers Can Prevent NFT Theft
If you own NFTs, you can prevent theft by storing the tokens in a cold storage wallet, advised Ronghui Gu, co-founder of CertiK, in an article published by Cointelegraph.
In the same article, NotCommon CEO Michael Pierce suggested always buying your wallet direct from the manufacturer rather than a third party, to minimize the odds of tampering.
Further, Gu recommended some typical cybersecurity best practices:
- Never click links that you don’t recognize or look suspicious when purchasing or selling tokens.
- Keep your passwords to online wallets safe.
- Revoke unnecessary access to your wallets.
How Original Artists Can Prevent NFT Theft
If you are the original artist of an NFT, you can also take steps to prevent theft, duplication and copyright infringement. First, you will want to copyright your artwork. It may still be difficult to prosecute a thief, but a copyright may prevent some people from thoughtlessly duplicating and selling your work.
Look for services, like those from Adobe and DeviantArt, that help you protect your art. DeviantArt Protect, for instance, scans blockchains and marketplaces for cases of infringement and alerts the artists.
What Is NFT Theft?
NFT theft is categorized by any unauthorized party obtaining, using or sharing an NFT they did not create or purchase the rights to, especially for profit. In other words, if someone copies an NFT and then tries to sell that copy on the blockchain, they have committed NFT theft, experts say.
It’s easy to do since you can take a screenshot of the artwork and sell it anonymously through a crypto wallet. “They’re taking the artwork from someone, without authorization, and making money off of it,” attorney Ashli Weiss said to Built In.
Thanks!
Who Owns NFT Copyrights?
The situation gets cloudy, though, when you consider that the owner of the NFT may not be the original artist. The original artist may still own the copyright to the NFT, and the person who purchased the NFT only has the rights to use it. In that case, the burden is on the original artist to enforce their copyright and prosecute.
“In a standard NFT sale, what you’re really buying is that singular instance of the image, with a certification of the purchase,” Adrian Lawrence, a lawyer, told Fortune. “In most cases, you’re not buying the underlying rights to exploit that work. That copyright will belong to the artist.”
Is Stealing an NFT a Crime?
Regardless of the owner — whether it’s the artist or the person who possesses the NFT — NFT theft is a prosecutable crime. However, it’s only a crime if the thief is using the NFT for profit. “Certain uses, particularly noncommercial and not-for-profit uses, won’t necessarily be an infringement … Whereas monetizing [a copied NFT] to put on T-shirts, for example, probably would be,” Lawrence told Fortune.
Can My NFT Be Stolen?
Your NFT can be duplicated. This could be considered one form of theft or copyright infringement against the original artist. However, the digital image can also be stolen off the blockchain if you are storing it online.
In this case, the thief would be taking the NFT out of your possession, the same way they might steal bitcoin or, in the case of other financial fraud, move money out of your bank account into their own. If the NFT was a video or an MP3 with music from your favorite artist, you would no longer have it to enjoy.
If the NFT was a token that gives you access to a special event, discounts or perks, you would lose those privileges if you could no longer show the NFT in your wallet.
What Should I Do If My NFT Is Stolen?
Let’s consider a worst-case scenario: You didn’t store your NFT in a cold wallet and now it’s been stolen. Your only recourse may be to contact the original artist who can enforce their copyright. You may also contact the platform on which you purchased the NFT.
If you are an artist who had your NFT artwork stolen, your first move should be to issue a DMCA takedown notice. Often, this threat of legal action is enough to deter thieves. If that doesn’t work, contact an intellectual property lawyer to assist with your case.
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