Watching Out for Fake NFTs!
Did you know NFT scammers want your precious NFTs, money and information? Learn how to protect yourself from their basic scams and attacks
A problem the NFT industry is currently grappling with is the issue around fake and plagiarized works. In fact, most NFT enthusiasts will tell you that it’s fairly commonplace to come across an NFT scam.
The reason the industry is seeing so many scams is because plenty of NFTs have racked up massive price tags. Scammers know this and jump at the opportunity to fool new users or excited fans with copies of others’ best works. To do so, they’ll launch NFT copies on other blockchains where the original doesn’t exist.
Or worse, they’ll even try to sell copies of famous NFTs without even minting an NFT in the first place! These scams don’t just try to steal your money, they attempt to steal your personal info, corrupt your computer, or steal your passwords and seed phrases.
It can be like the wild west at times in the NFT industry because the technology is still very new. But there are plenty of things you can do to protect yourself from fake NFTs and their dubious creators. First, you’ll need to know what you’re up against.
Common NFT Scams — How to Spot a Faker
The good news is that NFT scams aren’t all that original or special to NFTs. They are, however, still prevalent and should not be ignored blissfully. The bad news is that these scams are relatively easy to pull off at the moment.
Below are several classic scams the NFT industry has taken on that everyone should be aware of:
- Where you trade your NFTs matters a great deal. There is a plethora of fake NFT stores, websites and platforms that are designed to dupe even veteran NFT traders. Before clicking onto a new platform you haven’t heard much of before, give yourself a quick search on the web to see if anyone has reviewed the safety of the platform. Be thorough, it’s worth it! These sites will look just like the OpenSea NFT marketplace, or Solanart, but in reality they’re scams.
- Another common trick those pesky scammers pull is selling NFTs without displaying metadata. Any picture on the internet could be used as a counterfeit NFT, so make sure there is metadata available and that the info checks out across platforms. If you can’t find where an NFT was minted, it’s probably not worth your time.
- Impersonators seem to be rampant across the internet nowadays, especially in crypto and NFT communities on social media. These impersonators will copy an NFT artist’s posts, sometimes their websites, NFT collections, and even their accounts on NFT marketplaces if they can. Sometimes the original artist or NFT brand won’t even know their work is duplicated onto multiple NFT marketplaces.
It can be difficult to distinguish the original NFT creator from an impersonator, but studying their social media for post dates, or sending a DM often reveals the truth. Just don’t click on strange links in bios to find out!
- False giveaways and airdrop scams are also widely used to collect personal info or wallet seed phrases. Scammers will announce they are giving away free NFTs, but all you need to do is sign up for their website and connect your wallet to their platform. Next thing you know, you’ve been ghosted and your wallet info is stolen.
- Phishing scams happen in a number of different ways, but the ultimate goal for the scammer is to steal your login/password data. They offer links that look very similar to reputable website links, but actually infect your computer with a virus or send data to the perpetrator, such as your seed phrase. It is vital to never digitally store your seed phrases in your wallet. If this is stolen, your wallet is as good as gone.
- Pump and dump schemes can draw in lots of hype and excitement. Enough so that investors will pile in on an exciting project, but before you know it the project disappears and everyone’s money is gone. Remember, if it’s too good to be true, it isn’t. Always research a project thoroughly before investing anything into it at all.
Lots of these scams come down to good faith judgments. But if you don’t know the NFT creator, where they are minting NFTs, or anyone in their NFT community that can speak to their reputation, be very wary. After all, even established platforms have issues with scams.
Problems on the OpenSea
In Jan 2021, OpenSea revealed that scammers and plagiarizers used their “lazy minting” feature to make copies, spam, or fake NFTs. The problem was so extensive it persisted in 80% of the NFTs “minted” using this free feature.
The “lazy minting” feature allowed users to list NFTs for sale without ever writing them to the blockchain (since they never paid for gas fees). Without being responsible for gas fees until the NFT sold, scammers could replicate one NFT copy or a thousand until they fooled someone into buying a fake NFT.
Another headline came out a few weeks later in which OpenSea admitted $1.7million worth of NFTs had been stolen from a phishing attack that occurred while they were updating the platform’s contract system.
Thus, even established platforms can have major issues. These two problems from OpenSea’s NFT platform highlight how important it is to carefully select which NFTs you trade and where you trade them.
NFT Data Storage
An important check system NFT users should employ before trading is checking to see where an NFT’s data is stored. There is a massive difference between data resting on a server versus in an Interplanetary File System (IPFS). Single servers are centralized and are incredibly vulnerable to attacks. Whereas an IPFS is a decentralized, public data storage system and is therefore protected by a network of servers that verify and share data (hashes) with one another (much like Bitcoin or Ethereum’s blockchains).
Not all NFT data resides on an IPFS, and it’s not to say that those creations aren’t legitimate, they are simply not as protected or resilient to data corruption, deletion, loss, etc… as NFTs that are.
Tools for NFT Security
Thankfully, there are tools and tactics that have been developed to thwart wrongdoers in their efforts to scam innocent NFT users.
For example, DeviantArt has developed a tool called Protect. The tool is an advanced image recognition software designed to protect artists from art theft. It does so by notifying users of copyright infringement that may have occurred in various NFT marketplaces.
Some marketplaces have even started to incorporate manual verification methods, by which a human makes sure an NFT is legitimate before allowing the user to mint the work. Other marketplaces take it a step further by also seriously vetting potential creators prior to allowing them into the NFT community and marketplace.
At the end of the day, being willing to research prospective NFTs and NFT platforms goes a long way too. Common sense should tell you if something suspicious or too invasive (needs personal info or seed-phrases, or requires you to click on a shady link), don’t follow through with it. Always look to see if the creator has stated where they minted the original, and then check if there’s legitimate metadata to support their claims.
Stay Safe!
NFT scammers are out for your sweet, sweet NFTs, money and information. We covered most of the basic scams and attacks these malicious actors attempt to perform on everyday users. But there are surely other tricks and schemes out there that we missed.
In any case, using your best judgment along with copious amounts of research will protect you 99% of the time. When in doubt, there are plenty of useful tools and tactics designed to protect fans and brands, make sure to use them! And should you ever come across a scam, it’s always kind to keep your NFT community safe by sharing your experiences.
Plus, NFT fans and brands can rest easy knowing that the Fayre Marketplace will soon be launched. Every project that takes place on the platform will be verified, and new users will need to undergo whitelist/KYC integrations to participate. Your NFT security is a priority for us at Fayre!
KEEP YOUR NFTS SAFE, JOIN FAYRE TODAY!
All of our information can be found on our website.
Make sure to also check out our token, $FAYRE, here.
