NFT Scams: How to Avoid Falling Victim
If you Google “NFT scams,” the results will likely lead you down a rabbit hole filled with, in some cases, actual cartoon rabbits.
Non-fungible tokens (NFTs) have exploded into a multibillion-dollar sector of the crypto industry in the last 12 months alone. Top collector’s items, such as rare pieces from the Cool Cats and Bored Ape Yacht Club collections, trade for upwards of $30,000 or more.
If five- and six-figure price tags seem like a lot for a JPEG, NFT creators have a one-word answer for you: utility. Because NFTs create an indelible digital record of your ownership on the blockchain (aka the same tech on which crypto is minted), owning a digitally tokenized piece of art can also serve as your membership ticket to exclusive online clubs, gaming communities, Discord chat rooms and interactive experiences.
At least, that is, in theory. But in practice, NFTs are still new and a little messy. While blockchain enthusiasts consider them an exciting signal that mainstream crypto adoption is on its way, NFTs create some pretty lucrative opportunities for scammers due to the pure volume of money exchanging hands.
Ahead, we dive into what the most common NFT scams are, how to avoid them and why they’re becoming so frequent.
Common NFT scams (and how to avoid them)
Phishing scams and suspicious pop-ups
To buy your first NFT, you’ll need to sign up for a wallet that transacts on the Ethereum blockchain. MetaMask is perhaps the most popular Ethereum wallet for NFT collectors. However, MetaMask users were recently targeted in a phishing scam involving phony advertisements that asked for users’ private wallet keys or 12-word security seed phrases (a big red flag). There are also fake malicious pop-ups operating via Discord, Telegram and other public forums that link to normal-looking login pages, such as MetaMask or other popular websites.
If a bad actor gets a hold of your private information through a phishing attempt, they can drain all of the crypto in your digital wallet.
Catfishing and fake personas
Because NFT sales happen virtually, and all marketing is done on social media, it’s easy to get catfished. Popular NFT communities commonly hire influencers and celebrities to promote them, making it difficult to tell which ones are real or not.
How to avoid these scams
As a general rule of thumb, you will only need your seed phrase when creating a hardware backup of your crypto wallet or when recovering your wallet. Never enter information into the MetaMask pop-up, or any other pop-up while you’re at it. Always go directly to the verified website for any crypto transactions, never using links, pop-ups or your email to enter your information. Write your seed phrase down on paper, and never give it out to anyone — don’t even store a photo of it in your phone.
If you ever receive a direct message from someone who claims to be a founder, celebrity or influencer, don’t respond. It’s commonly known etiquette in the NFT world that C-level staff will never DM you unless you send them a message first or you come to a specific agreement in a public Twitter thread or Discord channel. It’s kind of like when you were young and your parents told you never to give information to a telemarketer who called your house. The same thing applies in the NFT world — if someone DMs you first, don’t click links or reveal any secrets.
Pacific is a decentralized NFT marketplace and an integrated platform for metaverse/GameFi assets. The project has received endorsement from some of the most eminent institutions and investors, including the Web3.0 Foundation, NGC, Gate.io, Krypital Group, PAKA, Candaq etc.