In 2022, non-fungible tokens (NFTs) became one of the biggest economic trends in generations when their enormous popularity led to funds pouring in from all over. However, NFT scams are an unfortunate, but natural, consequence of such a success. Although the massive interest has generated a lot of money for legit NFT projects, it has also suckered investors into investing their money into NFT-related projects that may be fraudulent or shady.
Nearly $41 billion worth of crypto was spent on the NFT marketplaces in 2021.
Scams are a big factor when dealing with NFTs and there’s unfortunately no avoiding them as they will happen. Luckily, the amount of scams that occur on a daily basis is nowhere near where as numerous as other scams in the crypto ecosystem.
However, it’s important not to be discouraged despite this, as you can learn how spot a scam. Here at NFT Space we will carefully analyze the 7 most popular scams that occur in the NFT space you should know.
But, Are NFTs legit?
NFTs have many uses and can be considered valuable. If investors are able to grasp the concept behind NFTs and how they are used, then they may find these assets to be quite legitimate as investments. Unfortunately, some NFT scams do exist – but spending some time researching the seller’s offering before committing will reduce your chances of having to pay for a scam item.
Popular NFT Scams 2022
1. Careful on NFT Pump-and-dumps Scams
Unfortunately, pump-and-dump schemes have become somewhat predictable in the NFT markets. Pump-and-dump schemes refer to when a group buys up NFTs or currency, artificially driving demand up. After they succeed, the scammers sell off their assets and leave others with nothing.
Cryptokitties is one of the most popular non-fungible token apps. This game allows users to collect and breed digital cats. The NFT tokens are on the Ethereum blockchain. People went crazy after they initially launched in late 2017, but these tokens were wildly unsuccessful six months later by 95%.
You should always check the history and wallet records for any project. OpenSea and any NFT marketplace will allow you to see the total number of transactions and buyers that have purchased NFT collections. Also, their social media handles, website, roadmap and team for more info.
2. Look For NFT Plagiarisms
Digital assets are steadily gaining popularity. However, they may become a target and copied in the process. Artists have repeatedly lost control over their work and find that others are copying it and putting it up for sale as NFTs, making money from what originally belonged to them. So if anything does seem suspicious about a seller or an asset then you should not buy anything from them or trade with them just to be on the safe side!
The blue check mark next to an artist’s profile picture on OpenSea and other NFT marketplaces is a sign that they are verified. Find the artist via Twitter, their website, or any other social media channels if there is one.
3. Don’t Fall into Phishing scams
Internet criminals are always looking for ways to gain access to your personal information in order to drain your digital wallet. Just two days after “CryptoBatz,” a digital token collection of 9,666 bats created by the rock star Ozzy Osbourne was issued, supporters were targeted with a phishing scam that drained the currency from the wallets of many people.
The fraud worked by posting fake links on behalf of the official Twitter account of the token project called CryptoBatz.
To prevent these scams, make sure you keep your private details safe, don’t share your crypto wallet phrases, and don’t ever connect to a site that shows phishing warnings.
4. Stop Listening to Fake crypto influencers
NFTs have gained popularity, especially among celebrities (e.g. Logan Paul, Paris Hilton..etc). Their role as “brand ambassadors,” or people paid to advertise a product by wearing clothing on which the company logo appears – has long been a widely known way of exploiting celebrity status to make money. More recently, advertisers and the public alike have begun to question whether or not those whose identities are used unknowingly on an advertisement are doing anything wrong morally.
To avoid these NFT scams, make sure that you understand realistically what the potential for this business offering is and whether or not it will live up to its promises. Is the celebrity endorsement authentic? Is there a good chance that your investment will reap profits?
5. Outbidding scams
Bidding scams are most common in the secondary market, when someone purchases an NFT via an auction and is looking to resell it for a profit. He will then try to find ways of changing the details so that he can sell the same item again and again. This, however, is against our rules, so if you notice anything suspicious it’s best to report this directly to us.
You should always double checking the currency is important when buying or selling. Do not let yourself get scammed into thinking it’s worth less than it really is.
There are several ways to prove the authenticity of an NFT find its metadata, it’s transaction history, or use a verification service. Another simple way to go about it is to speak directly with the owner by messaging them through their social media and then finding out more information about the specific NFT you own.
So, leave your comment below if your experienced these NFT scams, or someone you know, let us our readers educate the reader to be more aware.