NFT Scams: How to Keep Safe and Avoid them

A lot of drama and scams rock the Blockchain field daily. Rarely would a day pass without a scam case coming up. It is a sure thing you will read news touching on hacks, phishing attacks, or unsafe wallets across the crypto streets.

Yet, this should not surprise you. You see, cryptocurrency and blockchain apply decentralization as their strength. Thus, there are low regulations. Most authorities are struggling to formulate rules to protect investors. So far, no central unit is regulating the blockchain industry.

With this gap, a lot of weight is placed on the investor’s shoulders. You must be cautious, responsible, informed, and duly educated on best security measures before investing in Non-fungible tokens.

2021 was a vital year for NFTs. They took the cryptocurrency industry by storm. Investors realized a lot of profits through this venture. But, it didn’t go that smoothly for several investors. Some owners of precious NFTs became targets for scammers. Some NFT owners lost huge amounts of dollars due to phishing links. Besides, others lost money due to rug pull.

Despite the various ways tricksters trick the NFT capitalists, we have come up with several safety measures to reduce the chances of being scammed. Herein, we talk about some notable scams in the NFT space. Read through to have a glimpse.

What are NFTs

NFTs are one-of-a-kind cryptographic tokens that can’t be duplicated on a blockchain. You can represent real-world goods such as artwork and real estate with NFTs. These real-world tangible goods can be “tokenized” to make them more efficient to buy, sell, and trade while also lowering the risk of fraud.

Notable NFT scam in 2021

The past year saw many NFT scams. However, there is one that was full of drama. And here is how it went down.

CreatureToadz

This autonomous NFT project was established by Skinaro.eth. It is tied around two significant communities in the NFT space, CrypToadz by GREMLIN and Creature World.

Specific NFTs from CreatureToadz

Are you talking about NFT scams? The first thing to cross your mind is phishing links besides rug pulls. Phishing is a popular scam. In most cases, projects would guide you to their authentic social media handles for genuine links. The tricky question is, what happens when the top social media handles are breached? Well, that was the case with CreatureToadz.

Users of the CreatureToadz Chat got an unexpected notice on the official Discord on October 20, 2021, about a stealth launch.’ It advised people to start minting right away at the address provided in the mail. Since an admin of the official group uploaded it, shareholders with FOMO inherently believed the text’s contents. The attacker received a total of 88 ETH. Over 580 mint activities were using the phishing website. All this in under 45 minutes.

The CreatureToadz team took control of the Discord and implored users to stop minting. However, the group was perplexed by how the attacker gained access to the chat room.

To save face, the team offered an apology via a tweet. Furthermore, they offered to pay back the victims of the scam.

But, the drama unfolded when an NFT enthusiast Andrew Wang hosted a Twitter Space on the issue. The tweeps noticed that a Twitter handle linked to the hack was listening to the talk live. They traced the phishing link back to a Twitter account known as HEERR. The followers decided to call out the attacker, demanding he gives back the looted amount. On his part, the attacker identified himself as a teenager who wanted to expose the weakness of the NFT chat rooms. He pledged to return the stolen amount to the CreatureToadz team. The team later refunded the individual accounts affected.

Although the ending of the heist was fortunate, it left investors scared of the safety of NFT discords. This type of scam was not unique to CreatureToadz alone.

NFT Scams: How They Work

After seeing an example of an NFT scam, let’s go through some common NFT scamming methods that scammers use.

Phishing Scams

Phishing scams are attempts to trick investors and clients into accessing and engaging with bogus websites that appear similar to the real thing.

This is one of the most well-known and widely used attack methods in web history. This sort of assault might cause you to lose funds by trying to generate an NFT on the fraudulent web (draining your ETH without generating an NFT) or by inputting your account’s seed text on a phony MetaMask.

Discord and Social Media Hacks

In 2021, several social media accounts belonging to crypto influencers were compromised. The hackers posted several marketing videos of bogus projects. While that specific hack took place on YouTube, most social media hacks targeting crypto and NFT initiatives took place on the Discord platform.

By acquiring access to the Discord webhook function, attackers can gain the level of access and ensure interoperability by hijacking team members’ credentials or publishing links on the project news line. This approach has been used against many projects, including CreatureToadz, Monkey Kingdom, and Fractal.

Rug Pulls

A rug pull occurs when the group under a specific NFT project chooses to scrap the idea after it has been launched and retracts all-cash earmarked for the program’s future growth from the repository.

Solana Network recently broadcasted a $1.3 million rug pull from an NFT enterprise known as ‘Big Daddy Ape Club.’ This rug pull is one of the largest and most severe NFT rug pushes on the Solana network.

How to keep safe from NFT scams

After understanding the common NFT scams, journey with me to note some safety tips, you can apply as a member of the NFT network.

Do your research (DYOR)

Well, you want to invest in NFT? Ensure you carry out your research. Dont find yourself in a category of NFT enthusiasts who follow one influencer to the other without verifying data. Take your time to research and make informed decisions regarding the project.

Videos from Youtube might be captivating. Yet, they can’t match personal research on a project’s staff and project finer details. Besides, thorough research would determine if the artwork suits your venture.

Steer away from anonymous teams

Projects from anonymous teams are a red flag. It isn’t easy to ascertain the identities of such groups and do a background check on them. It is hectic to determine if these entities have been involved in previous scams. True identities are fundamental in predicting the team’s possible future actions.

Cross-check mint website against the official channels

Before connecting your account to a webpage, keenly check the URL. If you do not complete this procedure, you may become the subject of phishing scams.

Avoid dubious links

Be careful with the online links you click on your gadget. Apply caution with the gadget you use to access your crypto account. The links might hit your device with malware that targets your metamask. Besides, the malware might stalk your financial activities. If you can, use a different machine on a private internet connection while transacting cryptocurrency.

Dont share your seed phrase or private key

Be cautious with any site or person asking for a private key. Private keys are meant for only you, and you can only use them when you are backing up your wallet or restoring an old wallet in a separate gadget.

If anybody DMs you are seeking your keyword to issue you with an NFT or safelist your wallet for mint, it’s certainly a fraud. Also, be wary of any pop-ups alleging to be from MetaMask requesting that you re-confirm your secret word; this is a hoax.

scrutinize social media activity

You can observe the credibility of an NFT program through the nature of activities on their social media platform. Examine their social platforms ads to evaluate if they put too much emphasis on Influencer marketing. Also, check if there is no mention of future goals or utility arrangements for NFT investors. Furthermore, while the number of followers may imply a degree of enthusiasm in the initiative, the ultimate measure of interest is the amount of participation that every post gets from the group. Try following the chats to flag off any doubts before engaging.

Closing thoughts

This piece is vital because it makes you appreciate the hoax involved in the NFT world. Also, it helps you protect yourself while working in the cryptocurrency space. The article has done you justice if you learned to outdo the cons. But to maintain vigilance, keep knowledge. Cons are always coming up with innovations to scam users in the blockchain ecosystem. If you want to maintain safety, continually equip yourself with security measures. Remember, the cryptocurrency world is constantly evolving. Make sure you are always one step ahead. Always remember cryptocurrency trade is a risky investment due to its fluctuating nature. If you choose to invest, place any amount you are willing to lose. Otherwise, NFTs can be a worthy investment for you.