A lot has been written about scams and frauds in the cryptocurrency space. But with limited credible information and no regulations, the crypto market continues to be a hotspot of dubious activity. A Chainalysis report recently highlighted that Indians visited crypto scam sites over nine million times in 2021. Crypto scamsters have also started casting their nets wider and the latest to get trapped are investors in non-fungible tokens (NFTs).
Phishing and fake NFT site scams
The nascent NFT market has multiple websites and marketplaces. Many of these sites don’t have the brand recognition that popular websites for physical goods like Amazon have built over many years. And some of these NFT marketplaces are phishing sites where the scamsters create what looks like an authentic website to dupe visitors into sharing confidential details like their crypto wallet private key.
Once they get your private wallet information, they can steal all the cryptocurrencies you have stored in the wallet. Many of these sites also use attractive looking pop-ups offering discounts and freebies to lure people in.
What are some easy ways to avoid these NFT scams?
Rug-pull and pump-and-dump schemes
How do you avoid such scams?
These scams are exclusive to secondary NFT marketplaces and usually happen when you are trying to sell an NFT. In these kinds of scams, the bidder for you NFT may covertly change the cryptocurrency you have listed as your preferred means of exchange to another crypto that has a lower value. For example, you might have listed ether as the currency you want in exchange for the NFT, and the bidder may change it to ADA which has a lower value when converted into traditional fiat.
How are such NFT scams avoidable?
Fake NFT support
In this method, scamsters contact you as technical support staff on social media or messaging channels like Discord. They claim to be staff from official NFT marketplaces like OpenSea and try to persuade you into giving the security phrase for your wallet or any other vital credentials that can help them steal money from you.
What are some ways to avoid this type of scams?
Giveaways or airdrops
How do you stay safe?
These are only some of the types of NFT frauds plaguing the internet. While there are specific instructions you can follow to avoid frauds, the ultimate advice is to do your research before investing in any NFT or cryptocurrency.