What are NFT Scams?
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Many people love to buy and sell NFTs using other cryptocurrencies. Today, the NFT market has surpassed $40 billion and is likely to grow even more in the future. However, as the demand for these digital assets is growing rapidly, many scammers take advantage of this and engage in fraudulent activities. Due to the rise in popularity of NFTs and public interest in NFTs, the rate of scams has also increased.
So to help you out, we've compiled this guide to explain what types of NFT scams exist and how to avoid them. It will help you protect yourself from NFT scams. Read on to know everything about it.
How do NFT scams work?
An NFT scam usually works when scammers steal the NFT from your crypto wallet by tricking you. Those who are unaware of such scams end up selling their NFTs to websites and creators involved in such scams. There have been many NFT scams in recent years. decentralized application development They attach a monetary value to their NFTs and then use them to hack into their wallets via phishing emails or other ways. This way, the hacker breaks into your crypto account and gains access to your NFT wallet, from where they steal your NFTs quite easily.
Are NFT scams common?
If you look at the records from last year, you will be surprised how investors have witnessed so many losses due to NFT scams. This is why knowing the risks of cybercriminals is essential, and it will help you protect yourself and your NFT tokens from fraudulent activity. However, let's review some of the statistics from last year to give you a brief idea.
Another story from Fractal, who witnessed a loss of $150 worth of crypto through the fake NFT giveaway held in 2021.
These statistics show you that NFT scams are quite common, which is why you should take precautionary measures to ensure that you can protect yourself and your NFTs from NFT scams and fraud.
Top 10 NFT Scams You Can Encounter
No doubt, NFTs are becoming quite popular and there is no surprise in that. But as the popularity of NFTs increases, you may encounter some common risks. That is why; Here is the list of common NFT scams that you may witness. If something like this happens to you, you should avoid it.
1. Fake NFT Websites
Today, you will find several NFT websites that are fake. People have even received threatening messages from these websites about their NFTs and cryptocurrencies. Professional scammers often replicate popular NFT websites and markets. After which, they trick the users and the user ends up compromising their account details and other credentials.
And these scammers know how to trick the NFT owner; they use the highest level of the tool, which makes it difficult for a user to find out if the website is genuine or fake. Due to this, many NFT owners have to end up losing millions due to these scams.
That's why to make sure you don't fall for NFT scams, dapps development services always check the NFT marketplace URL before logging into the website or sharing any information.
2. Fake NFT Offers
NFT scammers often present legitimate trading platforms and send users emails related to bogus NFT offers. The main reason for sending these emails is to get the user to click on the link in the email, which ultimately leads to fake NFTs and makes them a victim of scams.
Once you enter your credentials and access the account, scammers can use keylogging or other spyware to record all your information and use it later to steal NFTs. Therefore, to avoid these types of scams, please check the sender address of any NFT trading platform emails you have received.
3. NFT Giveaways
NFT giveaways are the most legitimate way to trick NFT users and scam them. Several scammers are posing as an NFT trading platform and promoting the NFT giveaway campaign on social media. These scammers offer attractive offers and giveaways that grab people's attention. They often spread the word, prompting NFT users to sign up on their websites.
When you log into the site, scammers hack your credentials. NFTs can be easily accessed and information stolen. So, to avoid these types of scams, check the social media page and make sure the NFT URL matches the link sent to you.
4. Phishing on social networks
Social media impersonations are one way NFT scammers trick users. They use a high level of detail like the original NFT marketplace. This cyber criminal convinces NFT user to sell NFT on these social media on its originality and credibility. Due to this, there are thousands of people who have become victims of NFT scams. However, to avoid these types of scams, make sure to check the blue tick on the seller's profile, and it will identify the identity of the seller and help you avoid being a part of NFT fraud and scams.
5. Customer service impersonations
Most of the time, NFT users have several questions in their mind and they post them on the seller's profile. From which the scammers ask the question and use it to convince you about their websites. For example, they will give you avoidable answers and solve your doubts.
You will start to trust them and share your information, wallet credentials and passwords. This way, they can easily access your NFTs and scam your profile. However, decentralized app developer to avoid such scams, you should go to the Telegram server with the NFT creator's web page or social media account, which will tell you if the website is genuine.
6. Fake NFT Projects
As an NFT user, you might know the importance of NFT projects and how they can make you earn enough money. Due to this, many users try to buy NFT projects. Scammers are taking advantage of this.
They are launching fake projects, and users unintentionally buy those projects, becoming victims of fraud. When the NFT doesn't deliver the results they expected, they realize they've paid a lot for a project that isn't even worth it.
Therefore, to avoid such cases, look at the blockchain explorer and find the detection tools that will highlight the accuracy of the project.
7. Counterfeit or plagiarized NFTs
It is essential to know that minting an NFT will not offer you the owner or turn it into a new piece; they convert your digital file into something that can be stored on the blockchain. The scammer uses minting to trick NFT users who often believe in buying unique NFTs. Once they get someone's stolen NFTs, they create the account on the trading platform and ask for high offers.
In some cases, the assets are not worth it, but due to fraud, you pay to double their cost.
However, to avoid these types of scams, be sure to check the blue tick verification on the seller's or social media profile, and it will tell you about the genuine credibility of the seller.
8. Offer scams
Bidding scams often occur when you are trying to sell NFTs. When the interested buyer places the highest offer, the scammers change the cryptocurrency, and in this way, you will think all the time that you are using less value.
That way, instead of getting a hefty amount of 10 ETH, you get 15 USD. Therefore, to avoid such scams, you need to visit the sites and find out the currency used during the transaction. You should never accept offers that are lower than usual.
9. Investor scams
Investor scams are quite common in NFTs. This is because; people often remain anonymous when it comes to cryptocurrency. Scammers often use this to their advantage. They create a project that seems worthwhile and disappear when the funds are raised. That way, the scammer can make millions off the investments a buyer makes. However, to avoid such scams, it is better to sell your NFTs or buy NFTs from a verifiable user.
10. Pumping and discharge schemes
Several experienced NFT scammers use pump and dump schemes to increase the prices of NFTs. Although these prices are fake, NFT users often fall for them and lose their NFTs and other credentials. That is why; make sure you don't fall for such schemes. And to avoid such scams, check the NFT history. If there are many transactions with the same date, it indicates pump and discharge schemes.