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The rise of NFT scammers and how to protect yourself

Notabene

TL;DR Breakdown

  • NFTs have no replica, and copyrights belong solely to the owner
  • make sure you are not scammed when doing trade.

Scammers in NFTs

Non-fungible Tokens have been such a topic in both the art and the finance sectors of the economy. NFTs are tokens that deal with uniqueness as their determiner of value. They use the same technology as cryptocurrencies, but unlike cryptocurrencies, they have no replica, and copyrights belong solely to the owner of the NFT. After Jack Dorsey sold his first tweet at $2.9m, it set a great example to investors and artists and gave them ideas of what and where to trade in the form of NFTs. As fate would have it, some scammers saw this as an excellent opportunity to earn a massive amount of cash without doing much.

Is NFT a scam?

While some have begun investing in NFTs, some claim it to be a scam. The latter cling to their claims that some NFTs can be found on various websites for free. However, that is not the principle that NFTs work on. NFTs are owned because of their uniqueness. Taking an example of Beeple’s every day: THE FIRST 5000 DAYS, the creator Mike Winkelmann sold it to Vignesh Sundaresan (MetaKovan), who is now the owner of the piece but does not have copyrights on it. Fetching more than $69 million, the work must have been legitimate! NFTs are NOT a scam.

How one can get scanned

There are various ways that scammers can use to defraud you of your last cent! These include;

  • Hyping pieces of art to overvalue it. Since the art being dealt with is digital, it is hard to estimate the value.   Scammers could overestimate art because of its popularity and the buzz they have created around it. This leads to losses to other artists and wastage of money on an asset whose price has been exaggerated.
  • Use of stories similar to those of legitimate NFT dealers. They use these to lure interested NFT buyers into logging in with their credentials. Once this is done, hacking the account is easy. Scammers can also attract customers to giving their credit card information. 
  • Use of airdropping tokens and giveaways. Fraudsters can use links to lure clients into clicking links promising rewards and tickets. Some websites promise to multiply your money once you have sent a certain amount of money for ‘registration.’ 
  • Impersonation of brands. Scammers put up websites terming them as the support services or social media accounts for NTFs platforms. They also use these accounts to sell fake and non-existent NFTs.
  • Use of counterfeit NFTs and impersonation of artists. Artists like Derek Laufman and Devin Elle Kurtz woke up to stolen artwork. Their NFTs were sold on accounts that had their profiles but were not them. These cases have been reported on platforms like OpenSea, Rarible, and Audius. These are markets that artists can trade their NFTs. Some of these markets do not need verification of ownership before they mint them. When the proof is required, it is not difficult to fake. 

How to avoid getting scammed

To ensure that your art is safe and the transaction you are making is legitimate, one should follow guidelines.

  • Avoid clicking on links that you are not sure about. As a trader, one should not click on links whose source is not known. Some links lead to websites that are fraudsters’. Once you click on an unknown link, it could give hackers contact to your wallet.
  • Secure your password and username. It is important to note that no genuine person or organization is going to ask for your password. That is your secret as an investor and should remain so.
  • Conduct a personal search before transactions. An investor should carry out due diligence by searching for the NFT they wish to acquire. If the piece is on multiple websites, it is most probably that it is not legit. Authenticate accounts before carrying out transactions to verify their genuineness. 

As a trader, it is your role to make sure you are not scammed when doing trade. Following simple guidelines and being careful while doing business is vital!

Beatrice Mastropietro

Beatrice Mastropietro

Beatrice is an experienced freelance Crypto and Financial market writer with several years of experience writing for a variety of businesses, platforms, and media sources. She specializes in developing original content to fit her clients' needs with a dedication to quality and integrity.

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