How to Spot and Avoid NFT Scams
The NFT market has undergone strong growth, attracting the attention of investors, collectors and artists. However, as in any fast-growing industry, the number of fraudulent schemes aimed at unprepared market participants has also increased. In this article, we present a guide to recognizing and preventing NFT asset fraud so that you can protect your investments.
1. "Rug pulls" schemes
This type of fraud occurs when the creators of a project attract investors to NFT or cryptocurrency projects, promising high returns and a new interaction experience. However, after collecting significant amounts of money, they disappear, leaving investors with useless tokens.
How to protect yourself:
- Study the project team. Having well-known and trusted team members can be a sign of confidence.
- Check the availability and feasibility of the project roadmap.
- Look for project analyses from independent experts and the community.
2. "Pumping and dumping" schemes
In these schemes, a group of users artificially raises the price of NFTs, creating the illusion of high demand, and then sells them at inflated offers, leaving subsequent buyers with assets simply unsuitable for the market.
How to protect yourself:
- Be careful with projects that experience sudden and unreasonable price increases.
3. False sweepstakes and airdrops
Scammers can announce fake sweepstakes or airdrops, promising free NFTs or cryptocurrencies in exchange for performing actions such as connecting a wallet to a site or providing personal information.
How to protect yourself:
- Verify the authenticity of sweepstakes and airdrops through the official channels of the project or platform.
4. Imitation fraud
One of the most common forms of fraud is the creation of copies of the original NFT. Scammers copy the works of artists, making minor changes, and pass them off as original. To avoid falling into such a trap, always verify the authenticity of the seller.
How to protect yourself:
- Buy NFT only on trusted platforms such as NFTsky.
- Check the seller's history and reputation.
5. Phishing attacks
Phishing attacks are aimed at obtaining your personal data, such as wallet keys or recovery phrases. Scammers can use fake websites, emails, or social media posts posing as trusted organizations.
How to protect yourself:
- Never enter your private keys or recovery phrases on suspicious sites.
- Check the URLs of the websites and the email addresses of the senders for authenticity.
- Use two-factor authentication to further protect your accounts.
By following these recommendations, you will be able to protect your investments and avoid common fraud traps. Remember that the security of your assets starts with you.