NFT scams in 2024 [The Most Common Scams]

NFTs are all the rage these days because they provide a way for artists and content creators to sell their NFT collections for thousands, if not millions of dollars. In 2021 alone, NFT transactions totaled a whopping $17 billion, up 21,000% from the previous year. Unfortunately, the boom has also attracted a flood of NFT scams.

These scams can make you lose your NFTs or make them worthless in one fell swoop. You may even end up buying NFTs that will disappear before you can make a profit.

Key Takeaways:

As the NFT market grows, fraudsters are finding innovative ways to separate NFT creators from their hard-earned digital assets. The most common NFT cons are phishing, bid scams, pump and dump scams, and counterfeit NFTs. To protect your NFTs, avoid phishing sites and never share your master password with anyone or any site. Also, always research and verify an NFT before making a purchase. Use a robust VPN service to anonymize and encrypt your traffic.

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The trouble with NFT scams is that they are constantly evolving and you may not know exactly what to do to protect your digital assets. In this post, we’ll lift the lid on the most common NFT scams, explain how they work and what you can do to keep your NFTs safe, like using a VPN. Finished? Let’s jump right in.

How do NFT scams work?

Most NFT scammers attempt to gain access to your NFT account. They do this by using a variety of phishing exploits to get you to hand over your private wallet key. Once these scammers have access to your account, they will quickly drain it before you even become aware of the scam.

If scammers cannot get NFT holders’ login details, they will create a fake or worthless NFT project and prey on people’s fear of missing out and the lure of a quick buck to get them to invest. Once the NFT gathers steam and investments pour in, the fraudsters disappear with the funds.

5 most common NFT scams to watch out for

Now that we understand how NFT scams work, let’s break down five of the most common.

1. Back-Pull Scams

A backhaul refers to a scam where developers raise an NFT, but withdraw after receiving significant funds from investors. These crooked developers often use social media to build trust and fanfare around their NFT while they wait for investor funds to pour in. Then they shut down the entire project and disappear with the funds as soon as they have enough.

A classic case of an NFT back draw scam is the Frosties NFT back draw run by a pair of 20 year olds, Ethan Nguyen and Andre Llacuna. They touted their NFT with various promises, including exclusive mint passes, giveaways, and dibs on a metaverse game. However, they shut down their website and social media accounts after investors poured in over $1.3 million.

2. Phishing scams

Generally, hackers use phishing to gain access to your NFT account details. To do this, they send out fake links, often through email or popular social media channels and forums such as Twitter and Discord. Once you’ve clicked on the link and entered your details, hackers use keylogging or spyware to access and compromise your account.

Not surprisingly, NFT phishing scams are on the rise. For example, in February 2022, scammers made off with nearly $1.7 million worth of NFTs in a phishing attack targeting OpenSea – the most popular NFT platform. OpenSea asked users to update their contract details, but scammers copied the trading platform’s email and sent NFT owners links to fraudulent websites.

3. Offer scams

Bidding scams often happen in the secondary market when you try to sell your NFT. When you offer your NFT for sale, scammers place the highest bid and you will naturally want to sell it to them. However, these scammers may change the cryptocurrency used for the bid without your knowledge.

Imagine a scammer offering 20 Ether for your NFT art. You will expect to receive around $9,000 (according to the exchange rate at the time of writing). However, a clever scammer can eliminate the crypto to 50 Dogecoin, which is worth less than $5.

To avoid such scams, always check which crypto you are being paid with and make sure you don’t accept anything less than the agreed bid offer.

4. Pump and dump schemes

In a pump-and-dump NFT scam, fraudsters artificially inflate the price of an NFT through misrepresentation and the dissemination of misleading information. Once the price rises, they “dump” the NFT and disappear without a trace, leaving investors with worthless assets.

Usually scammers use social media and celebrity endorsements to build a frenzy around an NFT. In many cases, they pour money into the NFT, which increases the price and makes it difficult for investors to ignore.

5. Plagiarism NFTs

At their core, NFTs are about creating unique digital tokens. Unfortunately, plagiarism is rampant on many NFT platforms. Recently, OpenSea reported that over 80% of NFTs minted using its coin tool were fake. So chances are you might be buying a stolen copy of an actual artist’s work.

Not surprisingly, your NFT’s value will tank once it becomes clear that it is fake. This is why you need to verify an NFT before making a purchase. Also, be sure to check the seller’s history and social media profiles to confirm if the art is original and belongs to them.

Less common NFT scams

There are other equally dangerous but less popular scams that can also cost you your NFTs. Let’s look at some of them.

1. NFT Gifts (Airdrop Scams)

Also known as airdrop scams, NFT giveaway scams occur when fraudsters ask you to promote an NFT and sign up on their website in exchange for a free NFT. Once you’re done, they’ll send you a link that requires you to enter your wallet details to receive the prize. These NFT scammers copy your account details and use them to access your NFT collection.

2. Investor scams

Investor scams occur when fraudsters create legitimate NFT projects and pass them off as valuable investments. However, in reality the projects are worthless. After accumulating enough investor funds, the fraudsters disappear without a trace.

One example is the Evil Ape investor scam. The anonymous NFT creator disappeared with 798 Ether (ETH) worth over $2.7 million, never to be heard from again. To avoid such scams, thoroughly research the NFT creator to ensure they are trustworthy.

3. Imitation of customer service

This is a type of phishing scam where fraudsters pose as customer service agents for an NFT marketplace. They will usually contact you through social media channels such as Discord, Telegram or Twitter with a problem regarding your account. Then, under the guise of helping you, they will send a link to fake NFT marketplaces that require you to enter your private wallet keys.

As a rule of thumb, only respond to customer service requests from your legitimate NFT marketplace and their approved channels. Contact your NFT Market’s official customer support channels if in doubt.

Security Tips: How to Avoid NFT Scams

Now that you know the most common scams in the NFT space, below are some practical tips to help you outwit even the most cunning scammers.

Do not click on suspicious links. You could end up giving your account details to a fraudster. Never share your password or passphrase. Also, enable two-factor authentication on your account to add an extra layer of protection. Do your research before investing in an NFT. Always verify the NFT seller’s identity and history before making a purchase. Use a virtual private network (VPN) to encrypt and anonymize your NFT traffic. We recommend ExpressVPN, the best VPN for NFTs. Read our ExpressVPN review. Use a cold storage wallet to keep your digital assets offline.

Final Thoughts

The NFT space is plagued by a variety of scams and you can lose all your digital assets if you don’t keep your eye on the ball. The most common scams include kickbacks, phishing, bidding, pump-and-dump schemes, and counterfeit NFTs.

To secure your NFT, create strong passwords and enable two-factor authentication on your NFT accounts. Also, never share your seed phrase or click on suspicious links that require your private wallet keys. Use a VPN to encrypt and anonymize your NFT traffic. We recommend ExpressVPN because of its best encryption features.

Which NFT marketplaces do you use and how do you avoid scams? Have you ever been a victim of the disadvantages we mentioned in this article? Share your thoughts with us in the comments section below, and as always, thanks for reading! be sure to read our comprehensive online scam guide.

Frequently Asked Questions

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