They say that it is best to assume that everyone is a scammer until you get a confirmation stating otherwise. This method holds when it comes to Non-fungible tokens marketplaces.
Global NFT sales surpassed $4 billion at the start of 2022. Simultaneously, news of scamming in NFT marketplaces and platforms spread like wildfire: The first week of January saw Google searches for “NFT fraud” reach an all-time high.
With NFT scams multiplying daily, you should know a few classics that an attacker may use against you.
The Discord Scams.
Discord is a go-to platform for the NFT communities and the most popular one. It has a user-friendly interface that lets sellers chat with their potential buyers and share details on private chat servers. Each server can be branched into several “channels,” making it easy for the seller to handle and separate the buyers’ group from the interested group.
Furthermore, channels have text messages, voice recordings, and video calls, making it easier to communicate. But, this is where the trouble begins. Discord allows anyone to send you a direct message (DM). This message can contain malicious links. These links are posted as “NFT” links, but they can actually contain viruses, fake NFT platform links, or fake minting links.
This happens when a hacker gains administrator-level access to a Discord server and offers too good to be true deals. These deals are stated as “We are releasing 1,000 more NFTs of the BAYC collection due to high demand” or “This is a promotional event where we are distributing 100 NFTs from our collection for free”. Once people click on these links or mint the so-called NFTs, they realize that they’ve been duped.
- Turn off your DM from “anyone can message” to “only contacts”.
- DO NOT click on links from vague websites, only click from trusted and verified marketplaces.
- DO NOT try to mint NFTs for “promotional events” or such, check for the official announcement of the NFT makers first.
The Rug Pull Scam.
Minecraft was recently in controversies about a rug pull NFT scam. An Ethereum based play-to-earn game called ‘Blockverse’ was launched by creators claiming to be linked with Metaverse.
After selling the entire NFT collection in under 8 min and making huge profits, the sellers just disappeared.
The site was shut down, the Discord channel (official) was taken down, and the sellers could not be reached. Many victims came together on Twitter and Discord to protest and, after a lot of hard work and research, trailed the owners of Blockverse.
This is a classic example of the rug pull scam where NFTs and the owners disappear. Although victims did get a response from the creators, they did not get compensation.
An airdrop distributes cryptocurrency, NFTs, or tokens to a web3 wallet address as a free promotion or marketing gimmick. Malicious coding can be embedded in airdrops as well.
As a well-known figure in the industry, RAC claims that tokens are constantly airdropped into his online wallet. “The token’s name is a website to try to encourage you to visit your website,” he explains.
People click the link in search of free tokens, but because everything is programable, they make these tokens unsellable. It effectively binds the users and pushes them to hand over their funds, after which the hackers take the user’s money.
The most efficient way out of scams is to ignore them and not trust anything suspicious.