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Buying or selling an NFT can be straightforward, and not too different from another type of token transaction through a cryptocurrency wallet.
However, the NFT market has offered its own types of scams, while promising wild gains from rare items.
Spot Potential Rug Pulls
At a time when almost everyone could drop an NFT collection, the most common type of scam was for the team to simply take the money and disappear. It is best to avoid new collection promises and do due diligence on the team.
The most prominent type of rug pull happened in the Evolved Apes project. The developer team went dark, taking away more than 780 ETH.
While Evolved Apes had produced a complete art collection, the promise to build a crypto game universe was abandoned. When vetting a team, make sure the builders are serious about their project. An already up and running play to earn universe is ideal. Vaporware or the promise of token distribution are red flags.
Evolved Apes are still being traded, though as a tainted collection, and are not yet included in gaming.
Wallet Theft Through NFT Offers
Another trick to steal both valuable NFT items and other cryptocurrencies is to use human error.
A recent case involved a personal offer to sell an NFT for what looks like a very appealing price. The scam may appear as an email containing an OpenSea offer. It is best to ignore those emails, and only go through the official OpenSea pages, to avoid offer hijacking.
The actual deal fails on OpenSea or another platform, and the potential seller is asked to join a private chat to achieve the transfer.
An instruction is given to switch the crypto wallet language to Arabic. In most cases, the user won’t notice and actually click to expose their private key. From that moment, both their NFT and any other asset in the wallet are open to theft.
Outright Copycat Collections
Because some NFT collections are so popular, scammers choose the laziest path – to simply sell fake copies. These counterfeit collections managed to scam some users out of their assets.
Fortunately, most marketplaces will put a verified badge on collections. Opensea also put a higher barrier to entry with additional fees to discourage a flood of copycat images.
One of the older types of scam attempted to copy token sale sites. The same scam now repeats for crypto collections.
Usually, a pre-announced token sale may be directed to a fake or copy site, complete with an Ethereum address for deposits. The best approach is to verify the token sale and never follow links shared on social media or chat channels.
Buying Stolen Items
When scammers steal an NFT from a wallet, they may attempt to resell it. Unlike fungible tokens, however, an NFT is easily recognizable.
Some of the stolen images are well-known and it is not a good idea to buy one of them. They may be blacklisted on OpenSea and actually become unsellable through platforms. The fate of stolen collectibles is yet unknown, but it is best to vet the origin of items and images.
Fake Bot Verification
Fake bot verification first appeared based on tools to verify identity and NFT ownership on dedicated Discord communities.
When joining the channel, fake project bots attempt to ask for an unlocked MetaMask wallet, as well as the 12-word seed phrase. No project will ask for that phrase, as it is the capstone of crypto security. A bot or a person asking for that phrase is an outright telling sign for a scam.
This type of scam also exists as a fake Discord community, once again asking for restricted user information.
New NFT buyers and play to earn gamers must be very aware of impersonation attempts. The most common channels for those attacks are social media, especially Twitter, and Discord channels with attempts at direct messaging. Never expose private keys in QR or 12-word phrase form, and if in doubt, cancel the offer and look for the verified communication and resell venues.