NFT Frauds | How to Avoid Them in 2023


0
NFT scams: how to avoid them in 2023

Concerned about the safety of the NFT project you’re investigating and want to know how to avoid getting scammed? Staying safe from these schemes is essential, but knowing the best ways to protect your digital assets is essential. Luckily, with the right information, scams can be avoided. In this article, we’ll take a deep dive into exactly what these scams are, explore how they work, and provide more critical tips to help you avoid them in 2023!

What are NFTs?

A non-fungible token (NFT) is a form of crypto asset created by the same type of coding used for cryptocurrencies. Simply put, it is powered by blockchain technology and means that NFTs are not interchangeable or substitutable like other cryptocurrencies.

Unlike popular digital currencies such as Bitcoin and Ethereum, Non-Fungible Tokens (NFTs) cannot be traded or exchanged due to their unique properties. Conversely, fungible tokens like cryptocurrencies offer the unique ability to act as a medium of commerce due to their identical nature.

What types of NFT scams are there?

In 2021, the crypto market was driven to new heights by a unique product. Investors were lured in droves, and NFT sales recorded an unprecedented $24.9 billion increase for him. This is a leap from his measly $94.9 million in 2020!In 2021, the art world will be captivated by his Beeple “Everydays: The First 5000 Days,” which will sell for his staggering $69 million. , which raised Mike Winkleman’s fame. Even in the “crypto winter” of 2022, NFTs were able to reach staggering numbers at the end of the year. It closed with a staggering $24.7 billion in earnings.

As digital works of art like this continue to reach new heights of value, their multi-million dollar sales are unfortunately ideal for sophisticated scammers intent on exploiting innocent buyers. has become a target. As the popularity and economic success of the industry grows exponentially, so does the presence of malicious individuals who seek to take advantage of strangers. So what are her most common NFT scams and how can you avoid them?

rag pull scam

A rag-pull is a deceptive scheme that allows developers to attract significant attention and credibility to their NFT projects before disappearing as soon as they have enough investor funding. They use social media to create hype about their projects, encourage investor contributions, and then disappear without a trace. By exploiting unsuspecting individuals in this way, these unscrupulous developers have pocketed countless dollars from innocent victims.

Baller Ape Club, a notorious example of NFT rag-pull fraud, with a collection of 5,000 NFTs (approximately $2 million in total) at 2 SOL each, closed its website and social media accounts after investors contributed more than $1.30 Did. a million. To lure people into investing, the club made many attractive promises that were never kept.

airdrop scam

NFT giveaway scams, also known as airdrop scams, occur when criminals promote their brands and lure people to sign up for their sites in exchange for one free NFT.They then follow up with a link requesting wallet details in order to receive the prize, but in reality these scammers copy this data from you in order to break into your NFT collection. There is only one! On September 21, 2021, a harrowing revelation was made by a Twitter user @babbler_dabbler – Criminals looted his digital wallet and stole Damien Hirst’s valuable non-fungible token “currency”, estimated at the time to be worth over $41,000.

Phishing scam

Cybercriminals commonly use phishing tactics to gain access to Non-Fungible Token accounts. This may include sending fake links via email or social media such as Twitter or Discord. Once the link is clicked and the account information is entered, the hacker uses keylogging or spyware his program to take over the account and exploit it in his own way.

Just in February 2022, scammers acquired approximately $1.7 million worth of NFTs from OpenSea, the most popular Non-Fungible Token platform, through a phishing attack. Trading platforms were requiring users to update their contract details. However, the criminals mimicked his OpenSea email and instead sent a fake link to his website. Therefore, it is more important than ever to be vigilant against malicious attempts to steal your hard-earned digital assets.

bid fraud

Selling non-fungible tokens on the secondary market often risks falling prey to fraud. Scammers may place attractive high bids on your property to make it look like they are serious buyers and entice you to accept this offer. These bidders can switch the cryptocurrency they use for payment at any time without realizing it. So make sure the entire bidding process is transparent when selling!

pump and dump scam

Pump-and-dump NFT fraud is a common form of investor fraud. In these schemes, perpetrators create false hype and spread misleading information about Non-Fungible tokens to increase their value before “dumping” them on unsuspecting investors.

To draw attention to their schemes, they can use social media platforms or enlist the help of celebrities to trick potential buyers into believing that the property is worth more than the actual market price. Additionally, as part of this effort, they often invest heavily to make the scam look legitimate and attract even more attention from uninformed individuals looking for quick profits. .

stolen NFTs

The essence of NFTs is to create exclusive digital tokens. The problem is that there is a lot of plagiarism on many platforms. OpenSea recently said that more than 80% of his NFTs created using their tools are counterfeit. This means that if you’re not careful, you could be buying an illegal copy of the artist’s real-world artwork.

Beware of scams! If an NFT turns out to be fake, the value of the NFT can plummet rapidly. Authenticate them before you buy and take the time to research the seller’s history, social media accounts, etc. to ensure what you get is genuine art.

How can I avoid such scams?

Unfortunately, there are many malicious scams out there that try to trick you into revealing your cryptocurrency wallet information or tricking victims into purchasing fake NFTs. To avoid falling victim to scams, here are some tips to stay protected.

Maintain maximum confidentiality with your keys for an added layer of protection

Under no circumstances should I reveal my cryptocurrency wallet information to anyone else? The answer is no! Your key and recovery code are confidential.

Thoroughly research the seller

Before making an investment decision, make sure the seller has a verified marketplace account with a blue check mark. Additionally, examine their social media accounts and other listings. Also, don’t forget to read online reviews before buying.

Create secure, unguessable passwords for greater digital security

For optimal security of NFTs, it is important to set strong passwords for your accounts and cryptocurrency wallets. An additional measure to consider is two-factor authentication. Biometric means such as facial recognition and fingerprints make identity theft more difficult.

Trust only well-known NFT exchange markets

Avoid deals that seem too good to miss. With so many new markets emerging, the level of security they offer may not be ideal. Trust your investments and only use reputable exchanges such as OpenSea, Rarible, Mintable and Axie Marketplace for all your trades.

Do not click on suspicious attachments or links

No matter how original the link may appear, it can be misleading. To ensure that you are directed to the correct website, we recommend that you visit the site directly from your browser and avoid clicking on any links.

Cross-checking NFT prices

Before buying NFTs, visit trading platforms like Mintable and OpenSea to see if the prices are similar. If the price looks much lower or higher than those on these legitimate trading sites, it’s probably a scam.

ending note

NFTs can be a great investment, but they also come with risks. To avoid becoming a victim of such scams, always keep your key and wallet information safe, research sellers thoroughly before investing in NFTs, and create strong passwords for your accounts and wallets. is essential. Trust the well-known NFT exchange market when making trades, avoid clicking on questionable links and attachments, and cross-check prices on multiple sites.

By considering these precautions when making investments in digital art such as NFTs, you can rest easy knowing that you are protected from online fraud.

Unleash a world of possibilities with full-stack NFTICALLY market metaverse This allows you to launch your own collection without any technical ability. Experience everything the irreplaceable token has to offer this year and launch your own collection in 2023 to take advantage of this burgeoning industry!


Like it? Share with your friends!

0
Conor the Tech Veteran
He previously spent 6 years publishing research on tech stocks, and believes in using a combination of fundamental, technical, and quantitative analysis. Prior to a career in tech stocks journalism he was a technology and semiconductor analyst with a research team.

0 Comments

Your email address will not be published. Required fields are marked *