09 Jun Here’s How OpenSea Plans to Tackle Scam and Frauds
Derin Finzer, the project’s co-founder and CEO, has shared details on how the platform seeks to battle such fraudulent activities in the future.
OpenSea’s Efforts to Combat Fraud and Plagiarism
In a blog post, the chief executive argued that OpenSea expects to see significant “Trust and Safety” investments in a few key areas such as theft and scam prevention, IP infringement across the Internet, scaling review and moderation, and cutting down critical response times in high-touch areas.
As such, OpenSea will automatically hide suspicious NFT transfers to reduce their visibility on users’ profile pages. Even as fraudulent transfers will always exist on public blockchains, the NFT platform aims to conceal them from view.
The focus will also be on preventing NFTs from being shown on OpenSea. Finzer revealed that the team will spend the next quarter developing proactive solutions, such as creating greater protections around transferred NFTs, reducing spam, and collaborating with third parties and creators of all sizes. The platform has already started working with key rights holders to develop “image-detection” models for automatic takedowns.
Furthermore, OpenSea has set up a dedicated moderation team in a bid to scale review and moderation. Going forward, it will employ “critical auto-detection” systems for copyright issues and other fraud vectors. Finzer believes this step will be crucial in establishing a faster response time on critical items and cease spammy and scammy items that exist on public blockchains from being seen at all on OpenSea.
Investments are being poured significantly across critical areas of users’ issues to pull OpenSea’s average response times below 24 hours.
“To that end, our number one objective as a company is to improve Trust across our product – and to continue building the best team to do it. More to come soon.”
Thefts, Fraud, and Lawsuits
The latest mitigation efforts put forward by Finzer come at a time when OpenSea witnessed its troubles piling up just as demand for NFTs cooled down amid a broader market rout. The US law enforcement is also no longer turning a blind eye to the burgeoning economy, as evidenced by the arrest of Nathaniel Chastain, a former product manager at OpenSea, who was charged with wire fraud and money-laundering offenses last week.
In 2021, as NFTs became a cultural sensation, business spiked for OpenSea. But subsequent hacks and frauds have left many distraught investors complaining about the New York-based platform’s steps toward compensating fraud victims and cracking down on theft.
However, some users argue that OpenSea, which acquires a 2.5% cut each time a non-fungible token is sold on its platform, has a financial incentive not to stop the sale of stolen goods. Earlier this year, Robert Armijo, an investor from Nevada, filed a lawsuit accusing the platform of failing to employ reasonable security measures and profiting from the sale of stolen NFTs.
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