Investors, brands, and businesses, whether they favor non-fungible tokens (NFTs) or not, cannot avoid this new technology.
The NFT market expanded in 2021, with a projected total market value of $40 billion with celebrity endorsements from Snoop Dogg, Mark Cuban, and Stephen Curry.
However, as NFT became more popular, so did the interest of the public in NFT frauds, with Google searches for NFT scams reaching a record in early 2022.
Cybercriminals trying to extract profit at the cost of common NFT customers are flocking to the NFT business as more money floods in.
NFT scams have become increasingly sophisticated and serious over the last few months, underscoring the necessity for users to take caution in a decentralized environment.
Scams come in many forms, and it’s critical to understand how to identify them so you can stop them.
The following article will look at the most typical NFT scams and how to spot them and avoid them.
WHAT ARE NFT SCAMS?
Online scams do happen, just like any other investment, and they cost individuals a lot of money.
Some NFT marketplaces, for example, are phishing sites, where scammers establish websites that appear to be legitimate to trick visitors into providing personal information such as their crypto wallet personal key.
This is made worse by the fact that there is no way for them to get their money back.
BEWARE OF THE FOLLOWING NFT SCAMS
The NFT phishing scheme asks customers for their confidential wallet keys or 12-word security seed phrases via fraudulent adverts on fake websites and pop-ups.
Fraudsters will hack into your account once they have your wallet’s keys and deplete all of your crypto and NFT holdings.
This occurs when con artists steal an artist’s work and post a fake in an NFT marketplace, where they auction off counterfeit artwork. Uninformed buyers will then purchase an NFT that is worthless.
PUMP AND DUMP SCAM
Pump-and-dump tactics are when a gang buys up NFTs to artificially increase demand. Unwitting investors who believe the NFTs have any value will enter the auction and begin bidding higher.
RUG PULL SCAM
A rug pull is a scam wherein a project’s promoters hype it up on social media, then suddenly cease supporting it and grab their investors’ money after the price has risen.
As a result, the value of the NFT tumbles to zero, causing investors to lose money on the NFT.
A variant occurs when the developers of an NFT eliminate the ability to sell the token, preventing purchasers from selling since the developers have included code to prevent this.
Investment scammers would often use the relative anonymity afforded to NFT over the internet to construct projects that appeared to be feasible investments, only to flee with the funds they received from interested parties.
FREE NFT SCAMS
Scammers use social media to impersonate legal NFT trading platforms to advertise NFT giveaway schemes, often known as airdrop frauds.
If you share their information and sign up on their website, the scammers will give you a free NFT. After getting access to your account, they urge you to connect your Metamask wallet credentials to claim your prize.
During this time, they record what you enter and begin stealing your library of NFTs.
When investors wish to exchange their purchased NFTs on the secondary market, they fall victim to bidding frauds. Bidders may exchange your selected currency with low-valued cryptos without alerting you after they offer their NFT for sale in an NFT market, resulting in possible losses for you.
HOW TO AVOID NFT SCAMS
Never click on links or attachments that appear to be suspicious.
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.
Make your passwords strong.
For your blockchain wallet and other NFT accounts, you should only use unique, strong passwords. This can effectively safeguard you from NFT scams, which are used by criminals to steal digital content from more vulnerable people.
Two-factor authentication should be enabled.
Using two-factor verification on all of your NFT accounts can also assist prevent scammers from gaining access to your digital assets. Biometrics such as fingerprint authentication and facial recognition assistance make it nearly impossible to impersonate you.
Always double-check the price of NFTs.
Check the price of NFT on an official trading site like OpenSea, Axie Marketplace, or Mintable before making a purchase. It’s usually a fraud if the price looks to be significantly cheaper than what’s published on a real trade platform.
Verify the accounts of NFT sellers.
If you’re thinking about buying an NFT, make sure to check out the seller’s account to make sure they’re legit. You can find the blue checkmark certifying their authenticity on their media platforms or Discord profile.
Never reveal your recovery phrase to others.
You should never reveal your restoration passwords to anyone, just like your ordinary passwords. This could endanger your NFTs as well as any other cryptocurrency in your wallet.
Now that you know the inner workings of the most popular NFT scams on the web, you may safely buy and trade while being aware of the warning indications of possible NFT fraud.
There’s no better feeling than learning how to help defend yourself and the assets you care about in this world of rising cybersecurity dangers.