• NFT scams are becoming more prevalent in 2023 and 2024, targeting investors through phishing and rug pulls.

• Scammers often impersonate trusted platforms and create fake digital art.

• To avoid scams, verify sellers, stick to reputable NFT platforms, and use cold storage wallets for added security.

The NFT market has exploded in recent years, but with growth comes risk. As more people jump into buying and creating NFTs, scammers and hackers are increasingly targeting unsuspecting investors. From NFT scams like phishing schemes to fake NFTs and rug pulls, fraud is on the rise.

This article dives into the most common NFT scams in the space for 2023 and 2024 and shares practical tips on how to protect yourself.

NFT Scams: A Growing Threat in 2023 and 2024

Phishing Scams and Credential Theft

Phishing scams are rampant in the NFT world. Hackers pose as trusted platforms like OpenSea or MetaMask, sending fake emails or messages to lure victims to phony websites. These websites appear legitimate, luring unsuspecting visitors into providing their private keys or login credentials unknowingly – leading them to give access to scammers to make off with valuable NFTs.

In 2023, OpenSea was targeted by an unprecedented phishing attack aimed at draining wallets of millions in NFTs deposited with it by fraudsters impersonating its support team and seducing users into disclosing their login details – leading to millions in stolen NFTs from wallets drained.

Rug Pull NFT Scams

Rug pull scams are among the riskiest forms of NFT scams, often using hype to lure investors.

Once scammers have collected funds through selling an NFT project or by creating buzz around an initial offering, they then vanish without leaving investors with anything worth their while – leaving investors holding worthless assets as collateral for investments that never materialized.

2023 was marred by an unfortunate example of this when anonymous creators of the “Evil Ape” scam managed to scam over $2.7 Million worth of Ethereum (ETH), leaving victims disappointed and without recourse for compensation.

Fake NFTs and Digital Art Fraud

Fake NFTs and digital art fraud have become widespread problems. Scammers often sell counterfeit digital artwork, passing it off as original. In 2023, OpenSea reported that over 80% of NFTs minted on its platform were either plagiarized or fake.

Before buying an NFT, always check the seller’s identity and their transaction history. Stick to trusted marketplaces that have strict verification processes, and avoid projects with no clear creator profile or background.

NFT Giveaway and Airdrop Scams

Airdrop scams are another devious tactic used by fraudsters. Scammers offer “free” NFTs in exchange for personal details like wallet keys.

Scammers will promote these giveaways on social media or via direct messages before inviting users to click links that take them through to provide sensitive wallet data, allowing the scammer to gain access to assets held within users’ wallets.

In 2024, spam airdrops have become even more common, especially on platforms like Solana and Polygon. While some airdrops are legitimate, many are used to either market low-quality projects or steal wallet info. If you get an unsolicited offer for a free NFT, be suspicious—don’t click on any links or share personal details.

Customer Support Impersonation

Scammers also impersonate customer support agents from popular NFT marketplaces. They’ll reach out via platforms like Discord, Telegram, or Twitter, claiming there’s an issue with your account. Then they’ll send links to fake websites, asking you to enter sensitive information like private keys or wallet credentials.

The best way to avoid this scam is to only communicate with customer support through official channels. Don’t trust messages from unofficial accounts, and always verify the information by checking the platform’s official support page.

Spam NFTs and Low-Quality Airdrops

Not all spam NFTs are malicious, but they can still clutter your wallet and confuse you. Scammers often use these low-quality NFTs as part of engagement farming strategies—where they distribute NFTs widely to boost their project’s visibility. Some of these may not be dangerous, but others could lead to phishing schemes.

To protect your wallet, avoid engaging with unverified airdrops or spam NFTs, and clean your wallet by removing low-value tokens.

Also, Read:  African Artists using NFTs to promote their culture to the world.

How to Protect Yourself: Key Steps to Stay Safe

Protecting your NFTs requires a combination of caution, research, and NFT security best practices. Here’s how you can safeguard your assets:

1. Stick to Trusted Platforms: Use verified NFT marketplaces like OpenSea, Rarible, and SuperRare. These platforms have better security protocols and customer protection policies.
2. Verify the Seller: Before making a purchase, research the seller. Check their transaction history and look for a verified identity. This helps ensure the NFT is original.
3. Enable Two-Factor Authentication (2FA): Provide yourself an extra level of NFT security by turning on Two-Factor Authentication on both wallet and marketplace accounts, protecting your assets even with access to login details. Activating 2FA makes your assets safer from being stolen by potential attackers who might possess your login details but subsequently access them via 2FA authentication.
4. Be Cautious of Unexpected Offers: If you receive an unexpected NFT giveaway or promotional offer, proceed with caution.
5. Use Cold Storage: To reduce the risk of losing NFTs to hacks, consider using a cold storage wallet. Cold wallets store assets offline, making them far less vulnerable to online threats.
6. Keep Software Updated: Regularly update your wallet and marketplace apps to ensure you have the latest security patches.

Conclusion

As the NFT space continues to grow, so do the NFT marketplace risks and scams targeting its users. By staying informed about the types of cryptocurrency fraud and blockchain scams, doing your research, and using secure practices, you can protect your digital assets and navigate the NFT market with confidence.

Whether you’re a buyer, seller, or creator, safeguarding your NFTs is essential to avoiding the growing wave of digital art fraud and NFT scams.