Non-fungible tokens (NFTs), which are digital items that are unique, have experienced a surge in popularity. Due to this expansion, NFT artwork has been sold for millions of dollars. However, this success has also drawn con artists who prey on unsuspecting customers.
Scams involving NFTs have the potential to significantly reduce your earning potential or perhaps result in the loss of all of your NFTs. Even worse, you can invest in NFTs that fail to make a profit.
In order to avoid falling prey to NFT scams, it is important to educate yourself on what they are and how they function. This guide offers an overview of the most common types of scams, as well as prevention advice.
Top NFT scams
Non-fungible tokens (NFTs) have been receiving a lot of attention these days, becoming more and more popular in the crypto world. While NFTs can open up new possibilities for digital asset trading and creative expression, they come with certain risks that opportunistic fraudsters are keen to exploit. It’s important to be aware of the various types of scams being carried out while trading in NFTs so you can make sure your investments are safe and avoid falling victim to them.
Now here is an overview of the most prevalent NFT scams today, along with some simple strategies on how best to identify them before it’s too late!
Phishing
Despite being established for many years, phishing schemes are still a common means for hackers to access people’s digital wallets. Phishing schemes typically use false emails, advertising, and pop-up windows that direct people to a fraudulent website.
The bogus website will then ask for the victim’s private wallet keys in order to access their digital wallets. Any NFT collections or bitcoin in the digital wallet can be destroyed once scammers have access to this confidential information.
Investor scams
People stay anonymous when purchasing, selling, or transacting in NFTs with trading pairings like XLM USDT which makes it simpler to con people out of money. Fraudsters usually gain initial investment by developing a concept that sounds appealing and profitable. Later, the con artists vanish with the money.
Phony NFT websites
Scammers have created clones of popular NFT marketplaces and websites, which they use to steal users’ account information.
Even knowledgeable NFT owners may find it challenging to distinguish between a genuine page and a counterfeit one because they closely resemble the layouts and designs of the sites they are duplicating.
Pump and dump
A pump-and-dump fraud happens when a lot of individuals are trading sophisticated trading pairs, like USDT USDC, or buying a significant quantity of cryptocurrencies. Following that, the group sells the asset and reaps the profits while everyone else loses money.
Rug pull
Scammers lure buyers by advertising a fake NFT project or collection and promising them profits. Scammers advertise this item on social media, but once it is bought, they vanish with the money and break all of their promises
NFT Giveaways scams/airdrop ripoffs
If you share their message and register on their website, crooks might give you a free NFT. The problem is that when you type, scammers record it and can access your account and steal your collection of NFTs.
Ways to avoid NFT Scams
There are ways to engage in NFT transactions safely and avoid getting swindled.
Keep your keys to yourself
Never give someone the passcode to your cryptocurrency wallet. Just like a password or PIN number used to access a bank account or credit card, these keys need to be kept private and discreet.
Never Reply to Suspicious Messages
Do not engage with any shady emails, websites, texts, or messages. These could be phishing efforts to steal sensitive information and credentials or to try to download malware to your device.
Research. Research. Research
Research on your own, paying attention to the websites, vendors, and programs you use. Check out online reviews and look for the blue check verification mark next to a seller’s name. Verify through the social media profiles and listings of merchants to determine their credibility.
Compare NFT pricing
Visit trading platforms like KuCoin, Axie Marketplace, or OpenSea before purchasing an NFT to compare pricing. It’s most likely a fraud if the price appears to be significantly higher or lower than those on these trustworthy trading websites.
Think about utilizing a cold storage wallet and use a strong password
For offline cryptocurrency storage, use cold storage wallets. Cyberattacks cannot access the digital wallet. Create secure passwords for your cryptocurrency wallets and NFT accounts.
Another method of protecting NFTs is through two-factor authentication. It is more challenging for someone to steal an identity when fingerprints or facial recognition are used.
Access Trustworthy NFT Marketplaces
Never take up offers that seem too good to be true. New markets are always emerging, but they provide less security. Reputable exchange marketplaces are best to use. Watch out for new markets with weak security.
Final Words on How to Spot and Avoid Them
The number of different frauds you could fall for today is a little alarming. Cybercriminals develop new tricks to trick people every other week as they get more creative. You must, however, exercise caution and keep up with current market fads and frauds.
Strong passwords and two-factor authentication should be enabled on your NFT accounts in order to protect yourself from NFT Scams. Never divulge your seed phrase or click on dubious URLs that ask for your private wallet keys. You will surely keep yourself safe in the fascinating realm of NFTs if you know how to recognize them.
Read Next:
- NFT Pricing Strategies: How to Sell NFTs like an Expert
- 40 High Performing Cryptocurrencies by Market Capitalization
