NFT platform LiveArt burned 197 Seven Treasures NFTs stolen from its wallet in a hack over the weekend, The Block has learned.
The hacker gained access to the company's Treasury Wallet 2, which it used to store NFTs earmarked for marketing and promotions, on Sunday and transferred the NFTs to their own wallet.
LiveArt opted to destroy the stolen NFTs to reduce the total number in circulation after asking for community feedback on how to proceed. It also will compensate buyers who purchased the NFTs.
“We were in two minds about this but decided to give people the benefit of the doubt,” Boris Pevzner, CEO and co-founder of LiveArt, told The Block.
The company has filed a police report in Delaware and believes it may be able to identify the person responsible. Pevzner said they have not communicated with the hacker as they did not wish to negotiate.
The Block reached out to the hacker via a Telegram handle advertised in their OpenSea username. Writing in Chinese, they declined to share any information without payment and quoted Chinese author Lu Xun that, “Wasting other people's time is tantamount to seeking money and killing people.”
Hackers are on a roll across the crypto sector. October is in the lead for the most crypto funds stolen in a month, according to data released by Chainalysis last week. The blockchain analytics firm reports 11 different hacks totaling $718 million this month as of Oct. 12.
Following the hack, the NFTs were sold at progressively lower prices on OpenSea with the first going for 1.15 wETH ($1,514) and the final one for 0.45 ETH ($461).
Hack data shared by LiveArtX via Discord.
LiveArt has identified at least 75 of the marketplace NFT transactions as wash trades by the hacker and is now trying to identify collectors that actually suffered losses from the incident.
It will compensate each buyer whose NFT was burned with the exact purchase amount and a gas fee (0.02ETH) according to the snapshot taken at 10:15 p.m. on Oct. 16, the company said on Discord.
"For panic sellers who sold below 1.2 ETH before the first announcement published at 2:19 AM on 17th October, we will offer you the difference + gas fee between 1.2 ETH and your sale price within 48 hours."
Legitimate sales from the collection show the price of NFTs returning to their previous level after being driven down by the hacker.
© 2023 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.