Chris Chapman used to own a unique digital image of a spiky-haired ape dressed in a spacesuit that was worth a lot of money.
Mr. Chapman bought the token last year as the Bored Ape Yacht Club became a phenomenon. The price for the Bored Ape was set at $1 million by him in December. He received a notification from OpenSea that the ape had been sold for $300,000.
Mr. Chapman is a construction business owner in Texas. He said that OpenSea offered him $30,000 in compensation, but he turned it down in order to get a bigger payment.
The company has made a lot of dumb mistakes. They don't know what they're doing
Mr. Chapman has raised questions about Open Sea, a site where people can browse millions of NFTs, buy images and put their own up for sale. In the last 18 months, OpenSea has become one of the highest-profile start-ups in the world. The company has raised more than $400 million from investors and is valued at $13.3 billion.
As OpenSea has grown, it has had difficulty in preventing theft and fraud. The start-up made more than $6 million in payouts to NFT traders due to the glitch that cost Mr. Chapman his ape.
Open Sea is slow to block the sale of NFTs that were seized by hackers, who can turn a quick profit by flipping the stolen goods. Artists who used to view NFTs as a financial lifeline are angry that plagiarism has been found on the site. The company is facing at least four lawsuits from traders and one of its former executives has been indicted on charges related to insider trading.
Open Sea's troubles are getting worse as demand for NFTs cools. According to NonFungible, NFT sales have plummeted since September. Competition from newer marketplaces is one of the reasons Open Sea is facing it.
A utopian vision of a more democratic internet controlled by regular people rather than giant tech companies is depicted in the company's clash with users. Open Sea doesn't collect the names of most of its customers and doesn't advertise itself as a gateway to a regulated market. Users want the company to act like a traditional business and compensate fraud victims.
OpenSea executives said in three interviews that they were taking steps to improve trust and safety. OpenSea, which is based in New York, wants to respond to all complaints within 24 hours. A new screening process has been put in place by the company to prevent plagiarizing.
OpenSea's chief executive said that there is a period where they are catching up. The brand-new users that are coming into the space are trying to be accommodated.
Four and a half years ago, OpenSea was founded by Mr. Finzer, a Brown University graduate whose previous start-up, a personal-finance app, was sold to the financial technology company CreditKarma. According to Forbes, they are one of the world's richest billionaires.
The business model is easy to understand. Each time an NFT is sold on its platform, Open Sea takes a 2.5 percent cut. As NFTs became a cultural sensation, the value of cryptocurrencies increased.
OpenSea went from an obscure start-up to one of the most powerful middleman in the industry in a matter of hours.
Carrie Presley, who worked for OpenSea for a few months last year, said it would be difficult for any company to adjust to that kind of increase. There was a lot of chaos.
Some users argue that the company has a financial incentive not to crack down on the sale of stolen goods because it collects a fee from each sale. Robert Armijo, an investor in Nevada, sued Open Sea for failing to stop a hacker who stole several of his NFTs from selling one of them on the platform. The company acted quickly to stop the other stolen NFTs from being sold, according to the lawyers.
In February, Eli Shapira, a former tech executive, clicked on a link that gave him access to his digital wallet. Two of Mr. Shapira's most valuable NFTs were sold for more than $100,000.
Mr. Shapira reported the hack to Open Sea. He said that the company didn't take action. He has used public data to track the account that seized his NFTs and has seen the hacker sell other images on Open Sea.
It is easy for hackers to open an account there and immediately trade or sell anything they have stolen. All of these guys need to be protected.
After The New York Times inquired about the case, the company responded with a freeze on future sales.
Anne Fauvre-Willis said that the company was trying to improve response times when users reported thefts.
She stated that getting faster is important. We are making a huge investment in that today and will continue to do so in the future.
There has been a surge of plagiarism as sellers convert traditional artwork into NFTs and then list the images for sale without paying the original creator.
DeviantArt, an artists collective owned by the web-development firm Wix, runs software that scans millions of NFTs every day to detect images plagiarizing from the work of its artists More than 285,000 instances of plagiarism have been identified on Open Sea and other NFT marketplaces.
There is a form of payment called the digital currency, called the digital currency, called the digital currency, called the digital currency, called the digital currency, called the digital currency, called the digital currency, called the digital currency, called the digital currency, called the digital currency, called the It is possible to send a digital token from one person to another. The name of the payment network on which this form of digital currency is stored and moved is called Bitcoins.
There is a system for storing information on the internet called theBlockchain. A database is maintained communally and that reliably holds digital information. Non-currency-based companies and governments are also trying to use the technology to store their data, despite the fact that the original database on which all transactions were stored was the only one used.
It is possible to have a currency called corp coin. The first major company to list its shares on a U.S. stock exchange is a platform that allows people and companies to buy and sell various digital currencies.
It's on the web3. The idea of a new kind of internet service called web3 is what some technologists call the idea of a new kind of internet service.
A group of objects. A coin co-op is an organizational structure built withBlockchain technology. Investing in start-ups, managing a stable coin or buying NFTs are some of the common purposes of a DAO.
Liat Karpel Gurwicz is Deviant Art's chief marketing officer.
Open Sea has a tool that allows people to create NFTs with a few clicks, converting regular images into unique items whose authenticity is recorded on a public ledger. The company said in January that it would limit the number of NFTs that could be made with the tool. Even though many of the new creations had turned out to be plagiarized works, OpenSea decided to eliminate the cap after a backlash from NFT fans.
The concept of what NFTs were supposed to be has been bastardized by them. The market for my work is diminished.
OpenSea used image-recognition technology to crack down on plagiarism. It is unlikely that the scanning service will detect artwork plagiarizing from other websites because it only compares newly uploaded images with other NFTs listed on Open Sea.
The company hopes to expand its anti-plagiarism dragnet, according to Shiva Rajaraman. He said they would work with other people to get the work.
Mr. Chapman started experimenting with a new technology last year. He traded his Bored ape for an ape in astronauts gear because it evoked the space age history of Houston. His mother-in-law bought him a water bottle that was branded with ape logos.
The price for Mr. Chapman's space ape was set at 90 ether. In line with the value of other Bored Ape NFTs, he raised the price three months later. He was going to sell the NFT so much that he could immediately buy another ape and make money from the trade.
The ape sold for $300,000 in February. There was a glitch that made it possible for savvy traders to use out-of-date sales listings.
Mr. Finzer said that OpenSea had updated its technology to make it harder for thieves to reactivate old listings. Some victims were asked to sign nondisclosure agreements in order to receive payouts.
Mr. Chapman said that OpenSea initially offered him a 2.5 percent fee back when he sold his ape. He said that OpenSea increased its offer to 15 ether after his lawyer wrote to the company. His case was not commented on by Open Sea.
Mr. Chapman wants a larger reimbursement. He would have been entitled to a large share of the new coin if he owned Bored Ape NFT. Each owner received a chunk of coins worth more than $100,000.
Mr. Chapman missed out on his windfall because he lost his ape.
He said that he could have a down payment on his house if he wanted to. "That's all gone"