Watch Out for NFT Scams!

1. Fake NFT Stores - Hackers are putting up stores where fake artwork is displayed with the aim of getting user details. Some of these stores are replicas of popular NFT brands, while others are random unpopular brands. They sell fake artworks that do not exist and are usually cheap to access. A big hype in the NFT space is getting early, most of the offers on these platforms are too good to be true.

2. Artist Impersonation - This is one of the easiest tricks in the book. Many copies of famous artworks are digitally created and sold off before artists’ notice. A collector by the name of Pranksy paid around $300,000 for a copy of Banksy’s artwork. When the artist got notified, the links were disabled from Rarible, and in an unlikely event, the anonymous scammer returned the $300,000 to the collector. Unfortunately, another fake Banksy artwork that was bought at one million dollars on Rarible, an Ethereum-based NFT marketplace, was never refunded! This has become a disturbing trend for artists who expect blockchain technology to be a safe haven and protect their ownership rights. Some artists have begun to use AI tools to search for their artworks on multiple NFT stores so as to report any new sales before they are executed.

The blockchain is indeed super safe and leaves an audit trail of everything, but at the same time, the blockchain doesn’t know if you are the real artist or a scammer. Always beware.

3. Brand Impersonation - With NFT's still so new how can you know if a brand is real or not. Social media pages and fake websites of brands are being used to get users personal data. Most of these scammers create a believable profile online that looks like the admin to offer support services to distressed users.

When a user complains about their issue on a group chat or Twitter, a fake support service will reach out to them via a direct message and offer to help, establishing a trust relationship which may cost the user their assets. In August, an NFT collector fell victim to a fake OpenSea admin who wiped out his NFT wallet, carting away valuables worth about $480,000 by sharing his screen for troubleshooting.

Anyone can be a victim of brand impersonation. A quick search for popular brands like Rarible on Telegram or Twitter will generate multiple accounts all claiming to be the original. Even crypto literates and tech-savvy users who do not thoroughly examine the identity of support services can fall prey easily.

Always Do Your Own DD.