Non-fungible tokens (NFTs) are one-of-a-kind digital assets that belong only to their owner and are stored on a blockchain or digital ledger. One may be thought of as a one-of-a-kind, collectible work of art that is simply saved on the internet.
After achieving a market value of over $40 billion, this new cryptographic asset effectively captured the interest of online fans all over the world. As the popularity of NFT grew, so did the related scams, with Google searches for “NFT scams” reaching an all-time high in the first week of January 2022.
You should be aware of the tactics and schemes used to deceive people when purchasing any pricey collectible. Just as you should be aware of the tricks and schemes used to deceive people when purchasing any expensive collectible. Use this one-stop shop to learn practically everything there is to know about NFT scams, from what they are to how they operate. When it comes to spotting and avoiding NFT fraud, you can utilize the NFT tips as a guide.
NFT scams function by obtaining your cryptocurrency wallet login information or convincing you that you have successfully purchased or sold a genuine NFT.
Many cybercriminals are drawn to the monetary worth of these digital assets, which is why they use traditional techniques like social engineering and phishing to get access to crypto user accounts and steal NFTs.
It’s no surprise that as the public’s perception of NFTs grows, so does the number of frauds associated with them. Here are some NFT frauds to be aware of – and to avoid.
Sophisticated NFT scammers can imitate famous NFT websites and marketplaces in order to deceive consumers into giving over their account details. Even experienced NFT owners may struggle to discern the difference between a real and a counterfeit page due to the level of detail they apply.
Scammers posing as reputable trading platforms frequently send bogus offers to NFT owners via email. The purpose of these phishing emails is to persuade you to click on an embedded link that leads to a bogus NFT marketplace.
“Are NFT giveaways legit?” is a question that many crypto users have. The short answer is “maybe,” but “not probable.” Scammers frequently use social media to promote NFT giveaway programs, commonly known as airdrop scams, by impersonating real NFT trading platforms.
Another NFT fraud that is used to deceive NFT owners is social media impersonation. Cybercriminals establish an online profile to convince others of their legitimacy and sell them bogus NFT artworks, using the same amount of detail as they would for a false NFT homepage.
Hackers will try to spoof customer service sites on chat applications like Discord or Telegram answering the questions that NFT owners have.
Scammers frequently leverage fresh NFT initiatives to persuade people to buy fraudulent NFTs, also known as ”rug pull” scams. When a hacker builds a seemingly valid NFT that turns out to be non-resellable, the value of the NFT is basically taken away.
It’s vital to realize that minting a digital file doesn’t turn it into a brand-new piece of intellectual property or grant you ownership of it, which are two key NFT qualities. Simply said, this converts a digital file into something that can be stored on the blockchain.
When you try to resell your NFT, bidding frauds are common. After an interested buyer submits their best bid, they may substitute a lower-value cryptocurrency for the one you think you’re using.
Because people can remain anonymous when interacting with cryptocurrencies, investor scams are widespread with NFTs. Scammers frequently take advantage of this by creating projects that look to be worthwhile investments, then disappearing with the monies they acquired from interested parties.
Experienced NFT scammers utilize “pump and dump” strategies to artificially inflate the price of an NFT, which is inspired by a type of securities fraud. They achieve this by placing multiple bids in a short period of time to give the impression that the NFT is popular. They’ll cash out and sell to the highest bidder once it gathers traction and the selling price reaches a level they’re comfortable with.
There have been enough NFT scams this year to warrant placing them on your radar. Knowing the genuine risk these cyber threats provide might assist you in safeguarding your valuable tokens and avoiding scams.
- Frosties, 2022: When seeking to purchase 8,888 NFTs, the Frosties NFT collection fell prey to a rug pull scam, resulting in a loss of roughly $1.3 million.
- Todd Kramer. eth, 2021: An NFT collector stated that $2.2 million worth of Bored Ape NFTs vanished as a result of an NFT phishing email to Todd Kramer.eth.
- NFT criminals devised and marketed a bogus Fractal NFT giveaway in 2021, causing consumers to lose $150,000 in bitcoin.
Even though NFT frauds are likely to become more prevalent as time goes on, there are a number of NFT recommendations you can use to safeguard yourself and your NFTs.
Take advantage of these NFT tactics to help stop cyber hackers from committing NFT frauds.
If you’re not sure who sent you your NFTs, don’t click on any links or attachments. Phishing emails are frequently used by hackers to trick consumers into giving up their MetaMask wallet information.
For your cryptocurrency wallet and other NFT accounts, you should only use unique, strong passwords. This can help protect you from NFT scams, which are used by criminals to steal digital assets from people who are more vulnerable.
Using two-factor authentication on all of your NFT accounts can also assist prevent scammers from gaining access to your digital assets. Biometrics such as fingerprint scanning and facial recognition assist make it nearly impossible to impersonate you.
Before making an NFT purchase, cross-check the price on an official trading platform like OpenSea, Axie Marketplace, or Mintable. If the price appears to be much lower than what’s listed on the legitimate trading site, it’s probably a scam.
When interested in purchasing an NFT, always verify the NFT seller’s account to ensure they are real. You can look on their social media or Discord profile for the blue checkmark verifying their identity.
Finally, keep vigilance with respect to what we’ve discussed thus far. Never let your guard down and allow scammers a chance to get in.
The Crypto industry is full of malicious individuals, however, there are still places like CEX.IO that can always be trusted.