Top 7 NFT Scams We Should Avoid!

Nowadays, NFTs are all the rage because they offer a way for content creators to sell their NFT collection for thousands, if not millions of dollars. As the NFT market becomes popular, fraudsters are researching innovative methods to separate NFT creators from their digital assets. These scams can make users lose their NFTs or make them insignificant in one fell swoop. Most of the fraudsters want to get access to your NFT account by using phishing cons to get access to your private key wallet. Once the scammers gain access to your account, they will quickly drain it before you get wind of the scam.

Here is a List of Common NFT Scams

Let’s take a look at NFT scams that have managed to trick collectors out of millions of dollars since the development of the NFT market. In the list below, you will see a list of some common NFT scams and how you can avoid them.

Phishing Scams

To purchase an Ethereum-based NFT, you will need a crypto wallet such as Metamask that supports the ERC-721 standard. Metamask is one of the biggest and most popular wallets for NFT collectors and creators. However, Metamask wallets have been conducted by phishing scams; this includes fake ads, apps, and websites that ask the user of wallets for their private keys or recovery phrases. Fraudsters use the information to diminish your crypto wallet of all its crypto assets. To avoid these scams, you have to remember that you only need your seed recovery phrase to back up your wallet. So do not disclose it to anyone and keep them in a secure location.

NFT Airdrops Scams

Scammers create malignant NFT project websites that offer free NFT giveaways. While few NFT giveaways are absolute, a vast number of them are scams. This scam aims for users to connect their crypto wallets so they can use malicious code to steal users’ crypto assets in their wallets. You need to verify the NFT trading platform on social media to avoid this scam. 

Pump And Dump Schemes

Most NFT scammers use pump and dump schemes to unnaturally drive up their NFT collection price to make bank. They assassinate this by making a few bids within a short time period to build hype around the NFT drop. Once the fees have grown to a certain level, the scammers cash out and disappear clueless buyers with NFTs that they grossly overpaid. To avoid pump and dump scams, you have to review the transaction history and wallet records of the NFT collection in which you are interested. You can see the transaction numbers and buyers for the NFT collection on the marketplace of NFT like OpenSea. Moreover, Ethereum enables you to view the history of transactions on the Ethereum blockchain.

Bidding Scams

The bidding scams occur in the secondary market when you try to resell NFT to the highest bidder. Once you list NFT and the buyer places the highest bid, scammers switch the crypto used without informing you. This way, you end up getting USD 10 instead of the ETH 10 you agreed upon. To avoid bidding scams, you have to check the transactional currency before starting the transaction process.

Counterfeit NFTs

Minting an art piece as an NFT is not the same as owning the absolute or having intellectual ownership over it. On an NFT marketplace platform such as OpenSea, you can try any type of image into an NFT whether or not you own rights to it. Scammers betray users into thinking they are purchasing a legitimate NFY by plagiarising NFTs from other users’ work and proceeding to counterfeit lists on an NFT marketplace for auction. The buyer ends up purchasing counterfeit artwork, which develops into value once the community discloses the scam. To prevent this scam, you have to ensure that any NFT you purchase on a marketplace is from a verified account. You can also reach out to the composer through social media channels to confirm the NFT ownership.

Customer Support Impersonation

Scammers permeate the NFT project’s social channels such as telegram, discord, and pretend to be customer support. They aim to get their hands on users’ wallets’ private keys so they can steal your crypto assets in the wallet. To avoid this scam, you have to ensure that you only access a specific telegram channel or discord secret via an official page or site of NFT creators.

Social Media Impersonation

This scam is almost similar to customer support impersonation scams. Cybercriminals also like to create fake accounts on social media of NFT projects with the hope of getting social media users to access a fake project website of NFT to gain access to their victim’s wallets by letting them connect to an evil smart contract. Unfortunately, scammers in the NFT market as they are in the crypto ecosystem. Therefore, it’s crucial to stick to basic cybersecurity best practices, such as double-checking any site, app, or platform you use to ensure it’s appropriate and to avoid interacting with undisclosed individuals who are providing you something for free on social media channels.

Conclusion:

The NFT space is captivated by an array of scams, and you can lose all your assets if you don’t protect them. The most common scams are phishing, bidding, pump-and-dump, and many more. To secure your NFT from these scams, you have to create a strong password and enable 2FA methods on your NFT accounts. Also, never share your recovery phrase or tap on any suspicious links that require your private wallet’s keys. In the above section, you will see the top seven NFT scams, and You will also see how to avoid these scams to protect your NFT.

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Source: https://walletplane.com/blog/top-7-nft-scams-we-should-avoid