The NFT industry surged in 2021, reaching a value of roughly $22 billion and drawing in about 185,000 distinct wallets, in addition to an expected 280,000 buyers as well as dealers. However, as the industry has expanded, cybercrime has also expanded, as seen by eye-catching instances of NFT scams, NFT art frauds, and NFT gaming scams. Continue reading to find out more information about NFTs and learn how to evade NFT Scams.
How to stay clear of NFT frauds
Before approving any transaction, double-check the information. Are you using a reliable and well-known marketplace? Can you see the transaction history for the buyer or the seller? To find out whether there have ever been grievances about a creator’s transactions, read evaluations and consider their degree of participation. If you’re going to invest in a project, make sure the developers are real.
Never open attachments from senders you are unfamiliar with
Viruses that specifically target bitcoin wallets have been developed by hackers. You should avoid opening links in unsolicited emails since they may take you to scam exchange sites. Never open attachments or links from sources you don’t recognize.
Do not accept freebies
Giveaways and “free drops” are frequent in the NFT industry; however, they can frequently pose security issues. Because every NFT is bound by a contract that specifies what may be done with it, hackers can attach permissions to it to connect your wallet, trade your holdings, and other things. Never take an NFT from a stranger you don’t know and trust.
Never give anyone access to your crypto wallet’s secret key or seed phrase
Keep your seed phrase and private key secure. If someone obtains these credentials, they may enter your wallet and steal any cryptocurrencies or NFTs without leaving a trace. Use secure passwords for your bitcoin wallet as well as other NFT accounts. Use two-factor authentication whenever possible for all of your NFT accounts.
Check out the project’s creator
Find the NFT creator’s contact information and confirm it before sending them any money. Verify the project’s creators’ sincerity and disclosure of their identities. A warning sign is when you can’t identify the organization sponsoring a project.
Use official websites only
Never use links as well as pop-ups to input your wallet’s sensitive data; instead, always deal with reputable websites directly. Avoid being drawn in by supposed deals that can take you to dubious blockchain networks.
Avoid going to sites that are not reliable
It’s simple to type things incorrectly, but occasionally inputting a URL incorrectly by one or two letters will lead you to the incorrect website. Scam sites may be quite harmful in the NFT sector. Always verify the URL again to be sure you are on the right website, and refrain from taking any action with which you are uncomfortable. Always keep in mind that if an offer appears too good to be true, it generally is.
Verify the cost of the NFT project again
Check the pricing on an authorized trading platform, such as OpenSea or others, before completing any NFT purchases. Be cautious if the price is lower compared to what is advertised on a reputable trading website; it might be a hoax.
Burner wallets are used
With a burner wallet, you may set a maximum amount of money you’re willing to spend on a single purchase, including cryptocurrency for transaction costs. This lowers your likelihood of falling victim to fraud.
Verify the verification marks
On OpenSea as well as other NFT marketplaces, the majority of trustworthy NFT vendors will have a blue mark next to their usernames and a clear listing of the collection’s attributes. Verify that the individual you are purchasing is the real deal and that their account has been validated. Visit the artist’s website or social media accounts to find them. If the piece of art you wish to purchase is theirs, and if your user profile is accurate, you could want to approach them personally.
Several NFT frauds
NFTs and cryptocurrencies both operate in mostly uncontrolled markets. This implies that there is a chance that scammers may take advantage of weaknesses and commit crimes. Because of this, NFT Ponzi programs, OpenSea frauds, NFT art financing frauds, and other frauds have been covered in the news.
There are third-party markets like OpenSea that help with NFT transactions and offer security for each sale. But to trick people, fraudsters might put up dummy markets with identical URLs. An NFT’s visible elements are an easily duplicated picture and some unencrypted data; therefore, these websites can resemble actual markets rather closely.
A “rug pull” is a fraud when the perpetrators purposefully overhype a deal on social media to raise the price. Once they obtain the money from investors, they quit backing it, which causes the asset’s value to plummet and causes investors to lose money. A variation on this topic is when the creators of an NFT make it impossible to transfer the token by including code that forbids it, leaving the buyers with an asset that cannot be sold.