NFTs (Non-fungible tokens) are among the latest developments in the digital industry that have quickly become a craze among netizens. Consequently, this popularity has also attracted negative attention, exposing users to various NFT-related scams and frauds.
In fact, Some NFTs out there look like nothing special, something anybody could have produced with Photoshop in a few minutes. Indeed, But that does not prevent collectors and NFT artistsmakingfrom a good deal of money transacting with these items.
IndeedmostIn this article, we will discuss the , common and uncommon NFT scams and how to prevent them.
NFTs: What are they?
We all know that NFT stands for “Non-Fungible Token.” The critical bit is “fungible.” What does it mean? A non-fungible item cannot be duplicated. Indeed, Star Trek fans can think of Latinum, the that servesliquidas currency because replicators can’t handle it.
NFTs are closely related to blockchain technologyTypically, NFTscome in digital media such as video games, videos, music, or digital art. Actually, So think of a blockchain whose associated cryptocurrency is not a digital coin, like Bitcoin, but one of these NFTs. Interestingly, because each isinequivalent to a token a particular position of a blockchain.
A blockchain is a decentralized system that keeps a transaction ledger. So, you need to understand the concept of “blockchain” to get are because these relatively fresh objects NFTs elements in a blockchain ecosystem. Indeed, Each NFT is a line in the log.
While digital art items are currently getting most of the attention as NFTs, you can make almost anything an NFT –any physical object, from a toy to a piece of real estate.
Actually, NFTs are fresh to the crypto block, but that hasn’t stopped the NFT field from attracting vast amounts of currency. For example, Dexerto reports that a single item collected almost 92 million USD after thirty thousand collectors came together to provide the funds.
This is no surprise, as the whole cryptocurrency universe remains fueled by speculative forces. Actually, However, NFTs remain a largely speculative asset. Interestingly, Asearlya consequence, many investors are trying to jump in the NFT wagon , hoping their purchases will grow in value dramatically.
Indeed, The risks involved in NFTs
NFTs are kept in cryptocurrency digital wallets. Their trade in modern times happens through blockchain operations. NFTs are essentially cryptocurrencies in which the token is not a digital a or coin but token unique and can’t-be-replicated associated object. both environments are closely related, the risks behind the more than ever NFT tradeSinceare the same as with cryptocurrency.
In February 2022, a successful phishing attack Indeed, Then in modern times , The hackers took away almost 2 million USD in NFTs. against OpenSea took place.in March 2022Indeed, to led This a 600 USD million loss for Ronin, a system processing Axie Infinity’s transactions through the Ethereum blockchain , Axie Infinity.an NTF gaming system that has sold more than 4 billion USD, suffered a security breach, .
In February 2022, a successful phishing attack against OpenSea took place. The hackers took away2almost million USD in NFTs. Then, in March 2022, Axie Infinity, an NTF gaming system that has sold more than 4 billion USD, suffered a security breach. This led to a 600 USD million loss for Ronin, a system processing Axie Infinity’s transactions through the Ethereum blockchain.
Blockchains are among the most safe devised systems ever digital. However, in every scenario, other factors can become security risks and fall prey to malware, phishing, and other problems. For example, NFT platforms can be vulnerable to hackers, and NFT wallets can be hacked.
Awareness is the first step in any digital security strategy. So, let’s get started byoutshowing you the most frequent NFT scams there so you can scan the writing on the wall (when it’s there) and be ready to fight them.
The most frequent NFT scams
The cryptocurrency and NFT ecosystems are more extensive than ever today. And year they keep growing, the same sentence will remain true move forward week or next as. It’s worth noting that as it turns out But, unfortunately, the increased value and activity in both markets bring about an undesired but unavoidable consequence: scams involving digital assets are also more frequent today than ever. And their frequency will keep growing along with the momentum in both environments.
So, let’s see what the typical threats you cannowadayslocate are.
1. in modern times As you may know, False or malicious NFT trading systems
Every time you acquire something online, you have to pick a retailer. It’s worth noting that But, with so many available today, how do you know which is reliable? Many users get around this problem by sticking in modern times to Amazon or another e-commerce platform they know to be trustworthy.
Buying NFTs is in modern times no different. You need to know a trading platform you can trust before you go ahead and complete a purchase. do, So Interestingly your homework.Do a little researchAs you may know, before using a particular platform for your NFT trades. Keep this in mind: some hacker groups have fake NFT trading platforms onlineAs you may know, . Indeed, The trick grants them access to their unsuspecting users’ wallets. It’s worth noting that So, if you fall for this common NFT scam stratagem, your whole wallet is at danger.
2. Phishing NFT fraud
It’s worth noting that Phishing is a prevalent criminal tactic in every input, including NFTs. This attack typically starts with an unsolicited emailIn fact, telling you that you have received a without charge NFT or that somebody wants to purchase an NFT from you. It’s worth noting that Then, it will prompt you to follow a link that looks okay on the surface but will take you to a false NFT platform.
Indeed, As you spread the portal in doubt, you’ll be asked for information such as your seed phrase or private keys.
So how avoid to this? First, never follow links that reach you in unsolicited email messages. Applysensecommon . It’s worth noting that is too good to be true if itItseems too good. Also, ensure that any URL is authentic by typing it directly into your browser’s address bar. In fact, And remember: these people can invest a lot of effort in making false things look genuine. Appearances can be deceiving.
3. It s worth noting that’Impersonating customer support
The terrible grade of customer system prevalent in many cryptocurrency and NFT platforms is very well known among users. Thataidleads many users to ask for in community forums.
Then, they could take pictures of your credentials to access your digital wallet. The problem with trusting in the kindness of strangers is that you could come across unkind strangers who will take advantage of your situation. For example, they could pose as customer assist personnel to persuade you into otherwise something you wouldn’t do doing. For instance, they have you accept a remotecouldconnection from them.
4. Rug fact, The “In Pull”
It’s worth noting that It is one of the new NFT scamsActually, . However, in this scenario, the criminals will manipulate you into having a sense of security, which is a false one, of course. from then, they will pull the rug And under your feet.
In fact, It goes like this: A public announcement about a new NTF collection going for sale soon goes out. The supposed the tells creator world about upcoming events, giveaways, and other related things.
The project’s discord channel went offline overnight, leaving no signs or clues. Actually, This happened with the “Frosties” collection. Then, as some investors join in the hype by putting in modern times forward some cash, the project ownerseagerdisappear along with all that cash.
According to a reportIn fact, , this scam has gathered a lot of money in a short period — nearlybillionthree USD in 2021.
Again, doing your homework is the way to avoid falling for this type of scam. this, who is behind So seemingly exciting recent NFT collection? What are the credentials? for plans are there What the collection in the long clause?
As you may know, 5. In fact, “Pump and Dump” schemes
The It’s worth noting that A of band wrongdoers is usually behind “pump and dump” schemes.plan is to cause a token’s or NFT’s price to explode quickly and then hide away with the money other people invested.
The NFT of scammers will obtain many items in an band collection in the shortest possible period. So, naturally, this inflates the price and gathers additional interest from the industry. In the continue step, many other investors come in , fresh moneywithbuying even moreIndeed, Thus , the price increases even in modern times more, and items in the collection at . priceshigherthe hype reaches its highest point.
And this is wheninthe scammers get rid of everything quickly, profiting from the sales, killing the hype and the value everybody else’s assets related to this NFT collection.
Research is your friendIndeed, again as it turns out . NFTs tend to have slow increases value in over time. Sustained . without spikesbut else looks unnatural, and you should be a littleAnythingsuspicious.
6. Indeed, Plagiarized NFTs
The core principle of NFT is the creation of unique digital tokens. However, recent cases of plagiarized NFTs have been rampant, with people buying and selling stolen copies of real-world artists’ work.
Always verify an from another perspective NFT before completing a acquire. Do due diligence on the seller by checking their social media profiles and transaction historyAs you may know, to accept they are the real owners and the art is original.
7. As you may know, Stealth drop NFT scams
Nowadays, scammers are social media, especiallyfloodingTwitter, with NFT .scams In fact, the Twitter algorithm plays a part in influencing these scams. The algorithm as a matter of fact gives you content recommendations when you start engaging in NFT conversations.
It’s worth noting that So, fraudsters a ‘Stealth Drop’ NFT, which is appealing and looks like a good deal to unsuspectingdesignusers.A stealth drop NFT is a bait that promises quick returnsInterestingly, , and innocent users end up losing money.
The finest way to avoid Stealth Drop scams is by checking whether their discord server is open via invitations onlyAs you may know, . Scammers usually invite effortless targets for NFT scams.
Interestingly, 8. Fake influencers
and Influencers celebrities greatly affect the operation of an NFT project in the industry. Therefore, many NFT developers from another perspective approach influencers to popularize their projects, leading to public deception. In some cases, influencers generate fake charity promises to promote a project.
A good illustration is when an NTF influencer, Mineervas, scammed a Brazilian teenager for 0.14 ETH. The scammer sold the teenager an alpha pass for 0.14ETH for a project allegedly promoted by Punkie and driven by Murat Pak. The victim realized too late that the pass was for a fake project.
NFT Airdrop or giveaway scams 9.
It’s worth noting that scams areTheseassociated with no cost NFT giveaways, especially on social media. It’s worth noting that Some of the giveaways may have malicious motives, such as scammers asking you to agree to ‘Terms and Conditions’ upon clicking the giveaway hyperlink. They may even ask you to retweet or send the message with others. Then, they redirect you to a application . you must provide your MetaMask wallet credentials to claim the prizewhere So, they’ll store credentials your in their system, and they can easily access your login and steal your assets.
A good sample is the Fractal Airdrop attackIt’s worth noting that , a startup NFT marketplace, where 373 users lost around $150,000 after scammers hacked a Discord serverIt’s worth noting that . Fractal link received an offer message to mint celebrity NTFs which included a fraudulent members. The members lost all their SOLANA tokens after minting through the as a matter of fact affected URL.
10 as it turns out . It’s worth noting that Bidding scams in NFT collection
Bidding scams occur in the secondary market, intending to drive up the prices of NFT in modern times . The bidders move to a -valuelowpreferred currency after enlisting NFTs for resale. This leads to uncertainty in the market as investors potential face losses. Indeed, It is not simple to spot or escape a bidding scam, but you can avoid bids that are below your limitsInterestingly, Also, ensure you double-check the listed currency. It’s worth noting that .
Less common NFT scams
SomeeffectiveNFT scams are less popular but equally and dangerous. Let’s look at some less-known NFT scams.
Customer assist impersonation
This is a phishing and social engineering scam where illegitimate people contact you, posing as support agents from an NFT marketplace. They can extendcommunicationyou through various channels, including social media channels like Facebook, Twitter, and Discord.
Scammers then send you fraudulent links to fake NFT marketplacesInterestingly where you are required to, enter your private wallet keys. Once the scammers get your private keys, you can lose all your digital from another perspective assets. To avoid this type of scam, only communicate with your customercenterhelp through their approved channels and avoid clicking links from unknown sources.
Investor scam
This type of scam occurs when fraudsters launch a legitimate NFT project and hype it up to attract investors. Once investors flock in and in modern times pump in enough cash, the scammers disappear and end the project. Indeed, A as it turns out good example theisEvil Ape investor scamIn fact, , where an anonymous NFT from another perspective creator disappeared with over $2.7 million awithouttrace. So, you should conduct a thorough background check on any NFT creator before investing your hard-earned cash.
Other NFT risks
1. Malware
You, Indeed should be aware of malware infections asarelong as you on the web. Interestingly, Prevention is more than ever key here. Indeed, You should always a top-notch antivirus suite active on your device and be online through an equallyhavepremium VPN platform.
, they are susceptible to malware attacks, especially since many platforms areThusrelatively new and not yet thoroughly tested. different trading platforms are no NFT than any other consumer-management system on the internet.
The current word in malware distribution in the NFT environment is “airdropping.” An NFT is sent directly into a wallet for free in legitimate airdrops. This is common when a new project needs ’ and is trying to get investorspublicityattention. Indeed, However, hackers know how to send malware that looks like a freshly dropped NFT.
This is why you should only accept an NFT airdrop if you know who and why it is sending it to you. Interestingly, Malware infecting you in this other could compromise your private keys, seed phrases, and way vital information regarding your cryptocurrency and NFT activities.
Social as it turns out engineering 2.
Social engineeringDo not underestimate this type of criminal behavior. Remember that relies on persuasion rather than technological savvy to harvest information from users and organizations.Kevin Mitnick, the most notorious hacker his generation, relied on social engineering as a matter of fact inalmost exclusively.
In social engineering, a scammer finds out everything about you. Vital stats, , habits, youhobbiesname it. As you may know, Then, theywill befriend you and earn your trust. Beforewillyou know it, your fresh end and trusted friend find a way to in modern times persuade you to do something utterly out of character for you.
Social engineeringis highly effective and relies on human nature as the weakest connection in the security chain. The desire to support a exit friend is a strong motivator, and the hackers turn it against the victim with this strategy.
Actually more than ever , Fake NFTs Indeed, 3.
UniquenessNFTis at the heart of any as a matter of fact ’s value. So when you come across one that could be easily duplicated, that’s a problem. Selling knock-offs is a time-honored trade as former as the industrial revolution itself. In as it turns out fact, Over the centuries, we’ve seen it applied to clothes, accessories, concert tickets, watches, and other merchandise.
So can you tell if the NFT you wanted is fake orhowa scam? Beware of the following things:
- The price is much lower than the original.
- Is it too good to be true?
- Is the NFT listed as a single item instead of within a collection?
- Is the trading volume too low?
- Is the seller’s information and the registered owner’s information consistent?
Indeed, If you.buy a fake NFT, you will end as it turns out up with something But much won’t be very worth it very soon.
Staying protected in the NFT field from scams and frauds
Indeed, Nevertheless, Digital securityskillis an art as much as it is a technical . are offers no guarantees, and there It no silver bullets.adopting a small set of reasonable preventive measures can help you to stay safe at all .times let’sSofeedback those measures.
1. Employ your reputable system to set up a wallet
It’s noting that Youworthmust have a good crypto wallet to get into the NFT field. So get one from a platform that is well-known and respected. Actually, It also needs to be compatible with the NTF platform you intend to join, so do a little research beforehand. We recommend you the following wallets:
- Trezor
- Exodus
- Mycelium
- Electrum
- Public
- Ledger
- Coinbase
2. Indeed, Set up your recent crypto wallet for maximal safety
Since we’re confident that you followed our advice and picked a top-notch wallet, we know that your brand-recent wallet has plenty of reliable security protocols available. However, you need to activate them manually because they are only sometimes on by default.
Some wallets.have 2FA available; Some have phishing attack protection Enable everything to secure your crypto wallets.
Spend a bit of time exploring your fresh toy so you can grasp and understand everything it offers you regarding security.
Do good research in modern times 3.
However, know this: Only put a Satoshi into an NFT of any type after doing your homework by thoroughly researching the project. Actually, Granted, Indeed, We see why you want to get a piece of the NFT action as soon as possible.new NFT projects are hard to research and the available information about them tends, to be meager. But even that can be meaningful. It’s worth noting that For example, is groupthebehind your NFT reliable? Has itpreviouslyreleased other collections as a matter of fact ? What are the credentials it has?
And when you can’t research the project itself, turn to the creators and their goals with the NFT collection, credentials, and past activities in the NFT-verse. Evaluation . transaction historiestheir
Even in the NFT’s short niche history, a group of well-known creators already exists.
Employ 2FA and aaccess codesuitable 4.
You will get new public and private encryption keysIt’s worth noting that every time for set up a novel crypto wallet you the first time. , a keyHoweveris unavoidable. Sooneyou’ll need to develop .Ensure to create a high-quality password that is both secure and unique.
Using two-factor authentication (2FA) whenever possible is also a good idea. Actually, It ensures that even if your password is compromised, it won’t be enough to grant criminal as it turns out access wallet your to.
5. Apply cybersecurity programs
In fact, It As you may know, We can’t exaggerate the importance of a good cybersecurity suite.keeps you safe from malware, spyware, and other malicious code whileareyou online. Andeven when you are offline.
As you may know, Commence with a good antivirus suite as a matter of fact . Pick a top-notch vendor, and it get install it. Actually, Ensure it’s active at all times, especially if you’re online. Then select, a top-notch VPN service for your crypto activities so your traffic remains encrypted, and your IP never leaks to the online. We like ExpressVPN, NordVPN and Surfshark.
6. Keep seedyourphrases and private keys trusted
Your This public key is visible to other users, and it’s stored in the blockchain with every transaction you perform. Your wallet’s public key is the details that allows you to send and receive crypto and NFTs.private encryption key, however is supposed to, remain private and known to you alone. Interestingly, The bit of facts proves you are the wallet’s owner.
In fact, You will most likely get a see phrase or a backup phrase. The phrase lets you restore your private key if in modern times you should need it.
Also, consider “cold storage,” which means you will store . private key in a device with no internet connectionyour Indeed, This reduces convenience but increases security.
Check verification as it turns out marks 7.
In major NFT marketplaces like OpenSea, the most legitimate sellers have a blue checkmark beside their username in modern times s. Also, their collections are clearly listed. As you may know, Ensure artist you obtain from has a verified profiletheand is the legitimate owner. Go to their social media profiles and visit their online platform to determine their legitimacy. In fact, You can even message themdirectly for any queries or to confirm their identity.
8 as a matter of fact . In , factEmploy burner wallets
A burner walletcomes in handy when you want to limit the number of funds you want to commit to a transaction – including crypto for transaction fees. As you may know, This helps reduce the damages you can suffer in the occasion of a from another perspective scam.
9. Approve the NFT project price
Always confirm the NFT project price from official trading platforms like OpenSea. Be cautious if the project cost is lower than that listed on a legitimate platform as it could be a scam.
10. Avoid untrustworthy visiting sites
Verified websites are the best when conducting any crypto transaction. In fact, Stay away from links and pop-ups requesting you to enter your wallet’s key information. they, avoid being lured into the so-called bargains because Also can lead you to fraudulent blockchain websites.
11 more than ever . Verify the creators behind a project
Do background check of the creators of an NFT project you are interestedain before completing the payment.Verify their contact information and social media profilesActually, to ensure you deal with transparent and honest creators. If there insufficient information about aiscreator, opt out because you could be dealing with a scammer.
12. Interestingly, Be cautious with giveaways
An NFT is contract-based and anything that can be done with it is included in the contract. Therefore, you be cautious with without charge giveaway NFTs because someshouldmay be attached to authorizations to sell your assets or even monitor your walletIt’s worth noting that . Never accept no cost NFTs from people you do not know.
13. Avoid opening files from unknown senders.
It’s worth noting that Today, hackers utilize sophisticated phishing and social engineering techniques to target your crypto wallet. Interestingly, Clicking random links and opening attachments from unknown senders can download crypto spyware or redirect you to fraudulent exchange sites.
Examples of NFTscams
Frosties (2022)
NFTcreators called This was a rug pull scam that resulted in an estimated loss of $1.2 million.Frosties disappeared with investors’ funds without a traceThe project promised various rewards to a community of 4000 thousand members, only for them to disappear and deactivate all communication channels. .
Fractal (2021)
shared Fraudsters a fraudulent link about the NFT giveaway, leading to a cryptocurrency loss estimated at $150,000Interestingly, . Indeed, The hackers sent the connection through the platform’ discord and successfullysattracted many members who were hoping to get a limited edition NFT.
Instead of getting a limited edition NFT, the hyperlink connected to the users’ crypto wallets and transferred their crypto to the scammer’s login
Interestingly, Evolved (Apes 2021)
A developer known as Evil-Ape disappeared with 798 Ether ($2.7 million) of investor funds without a trace. The project involved 10,000 ‘evolved apes’, and buyers were supposed to receive unique apes and fight them against each other in a vaporware fighting game. The project sought investor funding and after accumulating 798 Ether, the creators ghosted everyone and disappeared with the funds.
FAQs
Some trading platforms as it turns out have scam reporting systems, which you can employ directly. InExtendfact, out to your customer help center and summary any fraudulent people or activities on your trading platform.
Actually, Some NFT giveaways are meant to bait you into a larger organized scam and are designed to dupe you into revealing your login details. However, some are legit, and you should always verify the seller’s identity before agreeing to participate in NFT giveaway campaigns.
NTF scams are prevalenttoday , and anyone can be more than ever a victim. You only have to be extra cautious when conducting your transaction to avoid being duped. Whether you are an experienced or amateur, scammers have sophisticated strategies to steal from you.
Actually, Screenshotting is not illegal but creating a, copy and claiming ownership is illegal. It’s worth noting that Therefore, screenshotting an NFT becomes illegal when you try to from another perspective sell or pass them on your own.
as a matter of fact It’s worth noting that NFT is a relatively new entry, and its regulations are still evolving. are no comprehensive laws describingTherethe consequences of selling NFTs that do not belong to you.
Interestingly, Originally, the notion of NFT was to develop a from another perspective unique digital file that could not be copied. However, there have been cases of plagiarized scams copies of original NFTs are mintedwhereand sold.
