As non-fungible tokens (NFTs) become more popular, it opens up new opportunities for online criminals. If you’re new to NFTs, below are some of the most common scams to be aware of. But first…
What are NFTs?
An NFT is a unique digital identifier that is recorded on the blockchain and is used to certify authenticity and ownership. It cannot be copied, substituted or subdivided. Ownership can be transferred which means people can buy and sell NFTs.
Top NFT scams
This is a take on the common phishing scam where malicious links or links to fake websites are shared by email. But, in this case, instead of being asked to enter credit card information or share personal information, you’re asked to enter your private wallet key. Once the scammer has this, they can steal whatever NFTs you have in that wallet.
Tip: Never disclose your wallet key or 12-word security seed phrase to anyone.
Pump and dumps
As with cryptocurrency scams, it’s not unusual for scammers to promote a specific project for which they own NFTs, to inflate the prices. They will then sell their hoard of NFTs at the high price and disappear, leaving others with overvalued NFTs.
Tip: Review the transaction history of the NFT to make sure it’s valued correctly
If you’re selling an NFT, scammers can sometimes offer you payment in one cryptocurrency, but then actually pay you in a different one with a much lower value.
Tip: Make sure you check the payment currency before beginning the transaction.
Whilst in theory the point of an NFT is to offer a way to authenticate a piece of digital content, it is possible to purchase fake ones. Scammers can create fake marketplaces where they sell fraudulent NFTs.
Tip: Make sure you buy your NFT from a verified marketplace