Jan 27, 2022
OpenSea Reimburses Users $1.8 Million After NFT Listings Error
(Bloomberg) -- Non-fungible token marketplace OpenSea has reimbursed about $1.8 million to users who suffered losses after confusion about a feature on the platform caused them to unwittingly sell valuable NFTs far below market prices.
OpenSea, which is one of the largest platforms for digital assets, refunded a total of 750 Ether for 130 wallet items, according to data it provided Thursday. The move comes after criticism this week that it has failed to properly address a user interface feature that allowed savvy opportunists to buy more than $1 million worth of NFTs on discount.
Read more: Opportunists Snag Over $1 Million in NFTs for Mere Thousands
Sellers who want to cancel their listings on NFT platforms have to send messages over the blockchain, and that requires them to pay transaction or “gas” fees. NFT users tend to have multiple wallets, and moving the items to a different wallet can be a way to circumvent the fees.
The feature affected users who had transferred their previously listed NFTs to other wallets without canceling the old listings. Attackers jumped in and exploited the ability to buy those NFTs on the cheap at their earlier listed price, and then were able to sell them at much higher current market rates. Assets in several collections were affected, including Bored Ape Yacht Club, Cool Cats, Mutant Ape Yacht Club and CyberKongz.
The loophole demonstrates the extent to which the user-experience decisions made by the biggest platforms in crypto can lead to expensive mistakes by even their most sophisticated customers.
Since the issue was reported on Monday, OpenSea said that it has actively been reaching out and reimbursing affected users. The platform added a “Listings” tab on users’ profiles that allows them to review both active and inactive listings of their NFT items.
Robert Garcia, 39, said he accidentally sold his Mutant Ape NFT for 4.7 Ether (about $11,300) on Sunday. Last year he had transferred his NFT to a separate wallet without canceling the previous listing because he would have had to pay a gas fee, which he recalls was over $100 at the time.
Garcia said he emailed OpenSea immediately after the unintentional sale, and received a response from them on Thursday that offered him a refund of 13.8 Ether.
“In consideration for any confusion, we would like to offer you a reimbursement,” the email, which was reviewed by Bloomberg News, read. It said OpenSea cannot cancel listings on behalf of users because it requires their signature, and apologized for not clearly explaining the process of canceling listings.
Garcia said he immediately put the refund toward the purchase of a new Mutant NFT.
According to OpenSea data analyzed by Bloomberg News, user jpegdegenlove made at least 340 Ether -- over $800,000 at current prices -- in a matter of hours by exploiting the OpenSea bug and selling at least five NFTs, three of which were from the Bored Ape Yacht Club collection.
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