NFT Scams: 3 Biggest Warning Signs, How to Avoid Losing Your Cash to Fraudsters

NFT is a rapidly growing market that sells digital content for millions of dollars. Unfortunately, there is also an escalating controversy linked to the industry. Malicious actors are taking advantage of NFTs to launch online scams, with three notable artists already falling victim to their scheme.

Cryptocurrency fans are probably familiar with NTFs, which stands for non-fungible tokens. An NFT acts as a digital certification that signifies ownership over the original version of a viral video, meme, art, or multimedia content. More recently, NFTs are sold for profit and royalties.

Keep in mind that to join the NFT market, artwork has to be "minted" or put on the blockchain. Unfortunately, users minting an object do not need to be identified as the owner of the artwork. Anybody can mint online art, and because of that, scams have gone rampant.

NFT Scam Prevention: How to Spot Fake NFT

MakeUseOf said that NFT is a financial opportunity for investors and scammers. Customers should be cautious on which side they are buying their merchandise. Experts listed out three indicators for NFT scams.

3. Opening a Fake NFT Website

Many scammers try to replicate popular NFT marketplaces to fool customers with their credibility. Unfortunately, new fans might have a hard time telling the difference. NFT buyers must conduct their own research before purchasing.

For example, an NFT known as ApeGang #4510 costs 10 ETH on official markets. However, on a scam website, an imitation NFT will only sell for 1 ETH. Be warned that these fake NFTs might contain incorrect minting addresses, and the contract addresses would not match up.

2. Social Media Impersonation

Another scam tactic is to impersonate creators. Be warned that the fake pages heavily resemble the originals. To boost their legitimacy, scammers also host fake giveaways under the creator's name. This is a digital theft against the original owner.

To avoid fake accounts, check for a verification tick next to the username. Also, scroll down on the activity feed and check on the number of followers, comments, and online activities. A real account will often include interaction with fans.

1. Investor and Customer Support Scams

Lastly, after the scammers convince victims with their fake identity and fake online shop, they would proceed to steal the money. Some of these scammers might contact victims to "fix" problems encountered with the faulty NFT product. Others will provide discounts or offers on special NFT. During this process, they might ask for sensitive information and payment fees.

If the interactions are getting suspicious, try contacting the artist or the official website on social media page. Never give any personal information or other sensitive data unless the other party is proven to be legitimate.

Fake NFTs Sell on the Internet

According to The Verge, three artists already had their artworks stolen through NFTs. They are all in the process of filing complaints. Listed below are some of their tweet reactions.

Devin Elle Kurtz was just feeling curious about NFT. Unfortunately, her work was spotted and stolen.

Simon Stålenhag felt shocked to see scammers taking advantage of his work.

Derek Laufman is questioning NFT's verification process.

Whenever making an NFT transaction, apply the three instructions above to avoid falling victim to ongoing NFT scams.