Author: Syedur Rahman
27 July 2022
2 min read
A series of incidents has seen NFTs become susceptible to tech savvy fraudsters, who continue to find new ways to hack exchanges and wallets or create spoof links to defraud investors.
In recent months, the hack of Boss Beauties on OpenSea via fake airdrop and of Bored Ape Yacht Club’s Instagram led to NFTs worth millions being stolen. The incidents are high-profile proof that NFTs still have a long way to go before they can be held with confidence on the blockchain.
But despite NFTs often being the target of fraudsters, they remain multifaceted and offer more than merely being an investment or the latest trend.
As an example, football’s 2022 Champions League Final saw an estimated 35,000 people arrive at the French national stadium for the match with fake tickets, resulting in widespread pandemonium and questions being asked about how to tackle bogus ticketing. Black market ticket sales and touting have plagued the ticket industry for decades.
Yet blockchain-powered ticketing looks like it is set to be a promising step forward. This innovative solution to the problem could ensure the credibility of tickets issued, enable all necessary data sharing and provide a unique digital artefact that commemorates the event.
This has already gone beyond the theoretical stage. Blockchain-powered ticketing has been tested in the US by the NFL (National Football League), which distributed 250,000 NFT tickets in November 2021. The French envoy for the 2024 Paris Olympics has also hinted that NFT ticketing solutions may be used to manage attendance for its events, with a trial run being proposed for when France hosts the Rugby World Cup in 2023. In addition, Binance has said it will sell NFT tickets for matches played by Italian top-flight football club Lazio, whose shirts it sponsors. As well as preventing the problems of fake tickets and ticket touting, the Lazio NFT will also provide club shop and match discounts, token giveaways and other football-based experiences.
By using NFT tickets, buyers are able to link the ticket to their phone through an app. Tickets are then tied to the mobile number, which eliminates touting. The NFT can be claimed as a collectible when the QR code is scanned at the event which, in turn, links to the issuer’s wallet. All tickets are transparently viewable in real time, promoting the ticket’s authenticity.
It is this openness and transparency that makes it extremely easy to verify the origin and authenticity of NFT tickets. This makes it much more difficult for scammers to con people. Additionally, tickets can only be resold within the same system, which ensures that control remains with the issuer and that secondary sale proceeds go to the organisers and artists.
Recent events involving mass ticket fraud have shown that there is a real need for new, innovative solutions to what is a large-scale problem. Ticketing is certainly one area where NFTs can be put to use to both provide issuers with a defence against fraudsters and create benefits for buyers. The launch of NFT tickets certainly showcases a different use for NFTs. But it is one that looks capable of solving most, if not all, of the problems associated with traditional ticketing.
Syedur Rahman is known for his in-depth experience of serious fraud, white-collar crime and serious crime cases, as well as his expertise in worldwide asset tracing and recovery, civil recovery, cryptocurrency and high-stakes commercial disputes.