If you think NFTs are a giant scam that only exists to launder money or swindle people, you will find this story strangely fitting for April Fools’ Day: Today, Taiwanesese pop star Jay Chou (周杰伦 Zhōu Jiélún) revealed to his 7.1 million followers on Instagram that his Bored Ape image — from one of the most prestigious NFT series in the world — had been stolen in what appeared to be a phishing attack.
The singer said that when he received a call from a friend who delivered the news, he initially thought it was an April Fool’s Day joke. “Then I checked and realized it’s really gone,” he wrote in a post (in Chinese), which includes a hashtag stating “Everyone, please be careful.”
NFTs, or non-fungible tokens, are receipts of ownership over digital items like JPEG images that are posted to a blockchain. The digital art stolen from Chou is part of the Bored Ape Yacht Club (BAYC) series, which is one of the most popular and priciest NFT collections on the market right now. On OpenSea, the world’s largest NFT marketplace, the floor price for a BAYC NFT currently sits at 109.99 ETH, or around $372,600 at current prices for the Ethereum cryptocurrency.
Identified as “BAYC #3738,” Chou’s stolen NFT image, which is pictured above, features a cartoon ape in a stunt jacket with pink fur, angry eyes, and an icy grin. Records on OpenSea show that the digital item was transferred away from Chou’s account around 3 a.m. New York time today and quickly changed hands at LooksRare, another NFT trading platform, for 155 ETH, roughly equivalent to over $500,000.
Citing reports of “suspicious activity,” OpenSea has temporarily disabled transactions of the stolen image and marked Chou’s account as “compromised.” On Etherscan, an analytics website that allows users to view public data about NFT trades, the crypto wallet address that Chou’s stolen item was first transferred to is labeled with a warning about its association with phishing and hacks. “Please exercise caution when interacting with this address,” the website says on the address’s page.
Early this morning, Bored Ape Yacht Club (BYAC) — the eponymous company behind the best-selling NFTs — sounded the alarm that hackers had “briefly compromised” its chat servers hosted by messaging platform Discord. On Twitter, BYAC warned users against minting — the process of taking a digital asset and converting it to a digital file stored on a blockchain — any Apes on the platform. It’s unclear if Chou’s loss was a result of the malicious attack on BAYC, and what he will do about the theft.
The China Vibe.
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Despite all the naysayers, the global market for NFTs has exploded over the past year, with NFT sales soaring past $24.9 billion in 2021, compared to just under $95 million the year before. With many NFTs suddenly becoming high-value assets, it’s not surprising that NFT holders and platforms have become targets for hackers looking to steal digital artworks. The theft from Chou is the latest in a string of cases highlighting the vulnerability of customers in a largely unregulated market, including the theft of 15 BAYC tokens from a collector in December 2021, and the disappearance of a mysterious NFT developer known as Evil Ape, who was accused of stealing $2.7 million worth of ETH from investors.
Although China has outlawed cryptocurrency trading and mining, there is no regulation of NFTs yet, and non-fungible tokens are usually bought with Chinese yuan rather than cryptocurrencies. Since last year, there has been an explosion of interest in NFTs in China, driven largely by endorsements from celebrities like Chou. In January, a firm backed by Chou launched the Phanta Bears, a collection of 10,000 algorithmically-generated digital avatars inspired by the pop star’s fashion brand. The digital collectibles reportedly sold out less than 40 minutes after their release on OpenSea. The artist has also been teasing other NFT projects scheduled for this year, including a collection sold under his record label, JVR Music Label.