OpenSea, a leading NFT marketplace, is facing a lawsuit for alleged extortion and negligence in protecting its customers. Robert Acres, a user of OpenSea, claims that he suffered large losses on the 58 NFTs in his account. According to him, he was locked out for three months following a phishing attack from which he lost two NFTs, thus he sued OpenSea. Acres alleges that OpenSea ended up locking him out of his account. To add to that, he claims that the platform failed to prevent the resale of the stolen NFTs. He estimates his loss at as much as $500,000 and is suing the NFT marketplace to cover his losses.
According to the communications with OpenSea, Acres informed the marketplace of the theft prior to the sale of the NFTs. However, the sale took place one hour later, indicating a lack of responsibility from OpenSea to respond to such alerts. OpenSea’s initial response, in its only public statement, appears to be deliberately disingenuous, leading to the lawsuit.
The incident highlights the need for improved security measures in the NFT space. NFT thefts are becoming increasingly common, especially since the summer of 2022. It is important for marketplaces to take necessary steps to protect their users and prevent the resale of stolen NFTs. The lawsuit against OpenSea serves as a reminder that neglecting the security and protection of customers can have serious consequences for NFT marketplaces.
The outcome of the lawsuit will be watched closely by the NFT community, as it will set a precedent for how NFT marketplaces handle incidents of theft and fraud. In the meantime, NFT creators and collectors are advised to be cautious and take necessary precautions to secure their digital assets.
OpenSea Can Allegedly Sieze Your NFT Assets
Allegedly, most OpenSea members are unaware that it can seize NFT assets and prevent them from moving or trading the NFTs for an indefinite period, even if the user did nothing wrong. However, the OpenSea help center page states the opposite to be the case. According to their help center, NFTs remain on the blockchain and are not in the custody of OpenSea.
Acres’s lead lawyer, Enrico Schaefer, also claims that OpenSea acquired Acres’ assets by assuming control of his account. He argues that conversion occurs when a thief/scammer takes control of another person’s property or funds. This way, that individual limits the owner’s ability to access it.
Traverse Legal also claims that OpenSea had three hours to act before the sale of the stolen NFTs took place on its platform. If OpenSea had acted in a timely manner, the NFTs could have been locked and potentially returned to the wallet. Whether Robert Acres wins the case remains to be seen. However, the action taken by Acres has opened the door for tens of other victims. FYI, OpenSea was sued in 2021 as well for a similar reason.