NFT Scams: How to Protect Yourself from Being Defrauded Online
Updated: Feb 7
Everything comes up with a cost, and when it comes to digital marketing and digital transactions, the cost is security threats that need to be fixed prior. As NFTs bring a revolution to the digital world as well as the world of trading, by setting the trend, it also has different types of risks. We all know that crypto and NFT lie on the same system of blockchain, as there are increased security threats to crypto users, NFT users have the same threats.
So, what to do next? Should we just skip these huge opportunities and doors to the future, or we should stand together against it and fight for our security rights? How can we fight against something if we do not have the basic knowledge of with whom we are fighting? In this article, we will have a brief discussion on NFT scams, their types. Don't feel scared of the scams. We have some efficient ways through which you can protect yourself from being defrauded online. Are you ready to learn about NFT scams and ways to protect yourself? Here we go!
What are NFT Scams?
“Evolved Apes' creator pulls an NFT scam worth $2.7 million.”
NFT scams are common online frauds that include fake money transactions, fake NFT networks, the use of fake NFT selling or buying IDs, stealing credit card information, or stealing copyrights. As NFT is a new technology for people, scammers are taking advantage of it by different new technologies like draining users’ digital wallets and their personal information. The scams have stretched their limits to hacking the personal accounts of users.
5 Major Types of NFT Scams
There are different types of NFT scams that can be a threat to you in the future. All you need is a deep understanding of the types of these scams and the ways to protect yourself from such scams. The major types are following:
Fake NFT stores
Brand impersonation on social media
"NFTs exist so that the crypto grifters can have a new kind of magic bean to sell for actual money, and pretend they're not selling magic beans. - Michael Burry"
1. Replica Stores
Replica stores are found not only in the world of NFT and crypto but everywhere. The term isn't new, but the technologies are. In this type of scam, scammers make a fake replica store just like the original ones, and by doing this, they trick the users. Through replica stores, they take credit information of users when they log into the fake one. Such scams take place not only in the NFTs but everywhere. According to recent research, the number of replica stores of Rarible, Opensea, and Audius has increased by 300% by the end of March 2021 as compared to the record of previous months.
2. Fake NFT Stores
It is just like replica stores with a little bit of variation. Such stores may not acquire log-in information or content from the original ones, but they use non-affiliated logos, content and then sell NFTs that even don't exist. Scammers have to do registration for a domain first. The scammers are now getting onto more technologies to make more realistic fake stores.
3. Artist Impersonation
In the digital world, it often gets difficult to identify the real seller. Many examples came in the past of artist impersonation. A recent example is of Derek Laufman, who is an artist, and a few weeks ago, when he woke up, he started receiving emails from his fans asking if he had started selling NFTs and his reply was 'it was not me'. It simply means someone took time to dig into his profile and then impersonate him as he is selling NFTs. Buyers need to be more careful about the buying process. They should do their satisfaction about the verification of the buyer he or she is purchasing from.
It is another technique pf scams in NFTs. Through this common marketing strategy, scammers fake out the giveaways. What are airdrops? They are the project giveaways of tokens and coins. The Airdrops marketing strategy is a famous marketing strategy through which you increase the users and by giving incentives to people.
“There is no free money, but people just cannot seem to resist the opportunity to get something for nothing. This continues to be one of the most common scams for NFTs and cryptocurrencies.” he says “The most damaging scam was the fake giveaways of Rarible tokens, - Bolster CTO and co-founder Shashi Prakash”
5. Brand Impersonation on Social Media
As we all are well aware of the deep connection between social media and the crypto community. Scammers and hackers are now targeting social media platforms to impersonate any brand or person. To target brands in the crypto sphere, scammers use these platforms. They pretend to be the official community of the targeted brand. These groups are just created to scam the crypto and NFT users. You have to be more careful and well-aware of these groups on social media platforms. According to the analysts, soon, users will create more such groups pretending to sell fake NFTs through these groups.
There are many real NFT selling groups as well. Just make sure to verify first before joining such groups on any social media platform. You can also use google search to verify such groups. Scammers know the worth of social media in crypto transactions, and that is the main reason for choosing social media platforms for brand impersonation and other types of scams. We mainly use social media for entertainment and often don't pay attention to minor details. But beware of such groups. Verify and don't just simply join them.
How to Protect Yourself from NFT Scams?
Don't get worried reading these scams. There is always a way out, and there are always precautionary measures through which you can avoid any type of fraud and bad experience. Following are some ways through which you can protect yourself from being defrauded online
1. Verify Before Joining
As we have discussed earlier that there are many fake groups on social media platforms, avoid joining any such groups without verification. Digital transactions are a very sensitive process, and if you get a little bit careless, there are thousands of hackers out there waiting for your minor mistake to hack your ids or steal your wallets. Beware of joining such fake groups.
2. Use Two-Factor Verification
Using two-factor verification is the best way to avoid scams. You can also use physical token generators if you want to secure your username and password. Whenever you log into any kind of crypto or NFT selling website, be very vigilant. Pay attention to minor details. Set your account as a two-factor verified one to get secured from such scammers and hackers.
3. Make Sure the Website is Legal & Valid
Many users get defrauded just because they don’t know that whether the website, they are using is legitimate or not. How to find out about the validity of any crypto or NFT website? Google search is the best yet simplest way to find out. Go to the Google search bar and then enter the link to the website. Whether the website is legitimate or not, Google will show you.
4. Use Internet Carefully
Scammers and hackers often take advantage of our carelessness while using the internet. There often pop-up some ads, links, or cookies that we don’t take seriously and often click on them. These can be the scams through which they can have access to your data. We often download apps without verifying their authenticity without knowing that there can be a fake one just to have your personal information yours to hack your profile.
What happened in the case of Derek? Someone did the proper research, and then the hacker pretended to be him. All this by using his personal information. From where did they get that? There must be some wrong click, wrong installation, pop-up ad, or something like that. So be extra smart while using the internet.
What Makes Cipherem the Safest Place for Transactions?
Cipherem is a digital platform to make your NFT or crypto transactions the safest ones by providing an eco-friendly defi system. Cipherem contains NFT marketplace, virtual trinkets, private vaults, digital assets, and extension wallets. It provides social media creators with a place to make a profile and make transactions without any external help. Cipherem allows them to monetize on a social platform without any scam threats. It is a haven for blockchain communities. Once you join this social platform, there is no fear of getting robbed by online scammers.
Every big opportunity brings hurdles, threats, risks, and other difficulties. But make sure not to fall apart by concentrating only on the harder part. There is always a lighter part too. Don't just focus on the threats, scams, or other risks in NFTs and crypto; see the opportunities they are bringing to you and the amount of profit and success they will be able to give to you in the future.
Just take the required safety measures, beware of such scams, and you are all set to enjoy the benefits of NFTs. We wish everyone in our NFT community stay caution and trade safely!