The 6 most common types of NFT fraud

Both cryptocurrencies and NFTs are not highly regulated areas and their vulnerabilities can be used by attackers to commit fraudulent activities. exist pyramid schemes related to NFT, OpenSea scams, NFT art financial scams and other incidents. The six most notorious cases of NFT scams are as follows:

1. Fake sites.

Third-party marketplaces like OpenSea make NFT transactions easy and secure. However, attackers can create fake marketplaces with similar web addresses to trick users. The visible components of the NFT (image and text information) can be easily copied, which means that fake websites on the market can be made to look very similar to the real thing.

2. Investor fraud.

Investor scam is a fraudulent scheme in which an asset is aggressively advertised on social media, leading to an increase in the price of an asset. As soon as the fraudsters receive the money from the investors, they stop backing the asset, causing a drop in its value and losses for the investors. A new variation on this theme is that NFT developers block the ability to sell a token: they add a code that does not allow the sale, and buyers are left with an asset that cannot be sold.

There are pyramid schemes related to NFTs, OpenSea scams, NFT art financial scams and other incidents

3. Market creation schemes (“pump and dump”).

Market making schemes involve the intentional purchase of NFTs to artificially increase demand. Unsuspecting buyers assume that NFTs have value, join the auction and start bidding. Once the price of an asset rises high enough, the scammers sell the NFTs for a profit, and the buyers get the worthless assets.

4. Phishing scam.

Before buying NFTs, you need to register a crypto wallet. NFT phishing scams typically use fake advertisements, such as those on Discord, Telegram messengers, and public forums, that ask for private wallet keys and a 12-word passphrase. Furthermore, scammers can impersonate MetaMask wallet support and send fake emails warning that the wallet will be blocked due to security issues. These emails ask you to click on a link to verify your account. The NFT phishing scam is designed to obtain personal data and steal funds from a digital wallet.

5. Help desk scam or help desk.

As with phishing, attackers pose as technical or customer support employees of blockchain marketplaces and contact unsuspecting users on Telegram or Discord. Under the guise of helping to solve problems, scammers send links to fake, but very similar to the real, sites to obtain personal data and access cryptocurrency wallets. Additionally, they can request a screenshot to help resolve the issue. What they really want is to get the crypto wallet credentials.

6. Pricing fraud.

Price fraud can occur when purchased NFTs are resold on the secondary market. Bidders can change the proposed selling currency to a lower value cryptocurrency without informing the seller, after the NFT sell order is posted. This can lead to potential losses for the seller if he does not double check the coin before closing the deal.