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<p><img src="https://choise.com/_next/image?url&#61;https%3A%2F%2Fcms.choise.com%2Fassets%2F4988d759-9fe2-4643-a96c-8cdab15788f1.png&amp;w&#61;3840&amp;q&#61;75" /></p><h2 id="header-0">Table of contents</h2><ul><li>What are NFTs and how do scams work?</li><li>Types of NFT scams</li><li>Examples of NFT scams</li><li>How to avoid NFT scams</li><li>How to report the NFT scam</li><li>Key takeaways on detecting and avoiding NFT scams</li><li>NFT scams: frequent questions</li></ul><h2 id="header-1">What are NFTs and how do scams work?</h2><p><a href="https://choise.com/news/crypto-world/what-is-nft-and-how-does-it-work-2023" rel="noopener noreferrer nofollow">NFTs</a>, or <a href="https://choise.com/news/crypto-world/what-is-nft-and-how-does-it-work-2023" rel="noopener noreferrer nofollow">non-fungible tokens</a>,  are unique digital assets that are stored on a blockchain, typically on  the Ethereum blockchain. Unlike cryptocurrencies like Bitcoin or  Ethereum, which are fungible and interchangeable, NFTs are one-of-a-kind  and cannot be exchanged for something else.</p><p>NFTs can represent a <a href="https://choise.com/news/crypto-world/10-nft-types-what-is-inside" rel="noopener noreferrer nofollow">wide range of digital assets</a>,  including digital art, music, videos, and even tweets. When someone  buys an NFT, they are buying ownership of the original digital file that  the NFT represents.</p><p>NFT  scams can occur when someone tries to sell a fake or fraudulent NFT to  an unsuspecting buyer. There are several ways that scammers can carry  out NFT scams:</p><ul><li><strong>Fake NFTs</strong>:  Scammers may create fake NFTs that mimic popular digital assets. They  may use similar names, logos, or designs to trick buyers into thinking  they are buying the real thing.</li><li><strong>False promises</strong>:  Scammers may promise buyers that the NFT they are selling will increase  in value over time, even though they have no evidence to back up their  claims.</li><li><strong>Fake marketplaces</strong>:  Scammers may create fake marketplaces or use phishing attacks to trick  buyers into entering their personal information or sending money to a  fraudulent account.</li><li><strong>Pump and dump schemes</strong>:  Scammers may artificially inflate the price of an NFT by using bots or  other tactics to drive up demand. Once the price reaches a certain  point, they may sell their NFTs for a profit, leaving buyers with  worthless assets.</li></ul><h2 id="header-2">Types of NFT scams</h2><h3 id="impersonation">Impersonation</h3><p>Impersonation  NFT scams are a type of NFT scam where the fraudster creates an NFT  that impersonates a well-known individual, brand, or company. The goal  of the scam is to trick buyers into thinking they are buying an NFT that  is associated with a reputable entity, when in reality, they are  purchasing a worthless digital asset.</p><p>To  carry out an impersonation NFT scam, the fraudster may create an NFT  that uses the name, logo, or likeness of a celebrity, musician, or  well-known brand. They may also create a social media account or website  that looks like it is associated with the entity they are  impersonating.</p><p>Once they  have created the fake NFT and associated marketing materials, the  fraudster will try to sell the NFT to unsuspecting buyers. They may make  false promises about the NFT&#39;s future value or try to create a sense of  urgency to encourage buyers to act quickly.</p><p><strong>To avoid impersonation NFT scams</strong>,  buyers should be cautious when purchasing NFTs associated with  well-known individuals, brands, or companies. They should do their  research and only buy NFTs from reputable sources. If in doubt, they  should reach out to the entity being impersonated to verify the  legitimacy of the NFT.</p><h3 id="rug-pulls">Rug pulls</h3><p>Rug  pull NFT scams are a type of NFT scam where the fraudster creates an  NFT project with the intention of deceiving buyers and then disappearing  with their money. The name &#34;rug pull&#34; comes from the fact that the  scammer pulls the &#34;rug&#34; out from under the buyers, leaving them with a  worthless asset and no way to recover their investment.</p><p>To  carry out a rug pull NFT scam, the fraudster will create a new NFT  project and promote it heavily on social media and other channels. They  will typically offer the NFTs for sale at a low price and promise buyers  that the price will go up quickly, creating a sense of urgency to buy.</p><p>Once  buyers have invested in the NFT project, the fraudster will suddenly  sell off all their own NFTs and disappear, leaving buyers with a  worthless asset and no way to recoup their investment.</p><p><strong>To avoid rug pull NFT scams</strong>,  buyers should be cautious when investing in new NFT projects. They  should research the project and its creators thoroughly and only invest  what they can afford to lose. They should also be wary of anyone making  unrealistic promises or creating a sense of urgency to buy.</p><h3 id="pump-and-dump-schemes">Pump and dump schemes</h3><p>Pump  and dump schemes in NFT scams involve fraudsters artificially inflating  the price of an NFT through misleading marketing tactics, hype, and  other techniques. They then sell their own NFTs at a high price, leaving  buyers with a worthless asset once the price inevitably drops.</p><p>To  carry out a pump and dump scheme in an NFT scam, the fraudster will  often create a sense of hype and excitement around a particular NFT  project. They may use bots to create artificial demand for the NFT, make  false promises about the future value of the asset, or use other  manipulative tactics to get buyers to invest.</p><p><strong>To avoid falling victim to pump and dump schemes in NFT scams</strong>, buyers should look for legitimate, long-term value in NFTs rather than get-rich-quick schemes.</p><h3 id="phishing-scams">Phishing scams</h3><p>Phishing  NFT scams are a type of scam where fraudsters create fake websites or  social media accounts that mimic legitimate NFT marketplaces or  platforms. The goal of the scam is to trick users into giving away their  private keys or personal information, which the fraudsters can then use  to steal their NFTs or cryptocurrency.</p><p>To  carry out a phishing NFT scam, the fraudster may create a website or  social media account that looks like a legitimate NFT marketplace or  platform. They may then send phishing emails or social media messages to  NFT owners, asking them to log in to their accounts or provide their  private keys or personal information.</p><p>Once  the fraudster has access to the user&#39;s private keys or personal  information, they can steal their NFTs or cryptocurrency. They may also  use the stolen information to carry out other types of fraud or identity  theft.</p><p><strong>To avoid phishing NFT scams</strong>,  users should be cautious when clicking on links in emails or social  media messages. It is also important to use two-factor authentication  and to keep private keys secure.</p><h3 id="customer-support-scams">Customer support scams</h3><p>Customer  support NFT scams are a type of scam where fraudsters impersonate the  customer support staff of a legitimate NFT marketplace or platform. The  goal of the scam is to trick users into giving away their private keys  or personal information, which the fraudsters can then use to steal  their NFTs or cryptocurrency.</p><p>To  carry out a customer support NFT scam, the fraudster may create a fake  customer support email or social media account that looks like it is  associated with a legitimate NFT platform or marketplace. They may then  reach out to NFT owners, posing as customer support staff, and ask them  to log in to their accounts or provide their private keys or personal  information to resolve an issue.</p><p><strong>To avoid customer support NFT scams</strong>,  users should always verify that they are communicating with the  legitimate customer support staff of an NFT platform or marketplace.  They should also be wary of anyone asking for private keys or personal  information, as legitimate customer support staff will never ask for  this information.</p><h3 id="bidding-scams">Bidding scams</h3><p>Bidding  NFT scams are a type of scam where fraudsters manipulate the bidding  process on an NFT auction platform to win an auction and then disappear  with the buyer&#39;s money without delivering the NFT.</p><p>To  carry out a bidding NFT scam, the fraudster will bid on an NFT auction  with a fake account or use bots to drive up the price of the auction.  Once they win the auction, they will disappear without delivering the  NFT, leaving the buyer with a worthless asset and no way to recover  their money.</p><p><strong>To avoid bidding NFT scams</strong>,  buyers should be cautious when bidding on NFT auctions. They should be  wary of anyone using bots or manipulating the bidding process, and they  should report any suspicious behavior to the auction platform. Finally,  they should only use reputable and secure payment methods to ensure that  their money is protected in case of fraud.</p><h3 id="counterfeit-nfts">Counterfeit NFTs</h3><p>Counterfeit  NFTs are fake NFTs that are designed to look like legitimate NFTs. They  are created by fraudsters who want to take advantage of the high demand  and value of NFTs.</p><p>To  create a counterfeit NFT, a fraudster will usually copy the artwork,  metadata, and other information from a legitimate NFT and then create a  new NFT that appears to be identical. They may then sell the counterfeit  NFT on a marketplace, often at a lower price than the legitimate NFT,  in the hopes of tricking buyers into purchasing the fake asset.</p><p><strong>To avoid purchasing counterfeit NFTs</strong>,  buyers should only purchase NFTs from reputable marketplaces. They  should also verify the authenticity of the NFT by checking the metadata  and other information associated with the NFT to ensure that it matches  the information on the blockchain. It is also important to be wary of  any NFTs that are being sold at unusually low prices, as this may be a  sign of a counterfeit NFT.</p><h3 id="nft-giveaway-or-nft-airdrop-scams">NFT giveaway or NFT airdrop scams</h3><p>NFT  giveaway or NFT airdrop scams are a type of scam where fraudsters claim  to be giving away free NFTs or conducting NFT airdrops. They use this  as a pretext to trick users into giving away their private keys or  personal information, which the fraudsters can then use to steal their  NFTs or cryptocurrency.</p><p>To  carry out an NFT giveaway or NFT airdrop scam, the fraudster may create a  social media post or email announcing a giveaway or airdrop of free  NFTs. They may ask users to log in to their NFT wallet or provide their  private keys or personal information to claim their free NFTs.</p><p><strong>To avoid NFT giveaway or NFT airdrop scams</strong>,  users should be cautious when responding to any unsolicited offers of  free NFTs and be wary of any offers that seem too good to be true, as  they may be a sign of a scam.</p><h3 id="investor-scams">Investor scams</h3><p>Investor  NFT scams are a type of scam where fraudsters create fake NFT projects  and use them to trick investors into giving away their cryptocurrency or  private keys.</p><p>To carry out  an investor NFT scam, the fraudster will create a fake NFT project with  a website, social media presence, and whitepaper that appear to be  legitimate. They may also use fake celebrity endorsements or other  marketing tactics to make the project seem more credible.</p><p>Once  they have gained the trust of investors, the fraudster will then ask  them to invest in the project by sending cryptocurrency to a wallet  address or by providing their private keys. Once the fraudster has  access to the investor&#39;s cryptocurrency or private keys, they will  disappear with the funds, leaving the investor with nothing.</p><p><strong>To avoid investor NFT scams</strong>, investors should be cautious when investing in any new or untested NFT projects.</p><p><img src="https://cms.choise.com/assets/9ad8a85f-5c9b-4603-8141-725bd01d0763?width&#61;1600&amp;height&#61;290" /></p><h2 id="header-3">Examples of NFT scams</h2><ol><li><strong>Fake celebrity NFTs</strong>:  In March 2021, a fraudster created a fake Elon Musk NFT and sold it for  $1.5 million on the NFT marketplace, Rarible. The NFT was later  revealed to be a scam, and the buyer was unable to recover their funds.</li><li><strong>Fake NFT projects:</strong> In February 2021, a fake NFT project called &#34;Homer Pepe&#34; appeared on the NFT marketplace, <a href="https://choise.com/news/crypto-world/nft-security-issues-2023" rel="noopener noreferrer nofollow">OpenSea</a>. The project was a scam, and the fraudster disappeared with the funds raised from investors.</li><li><strong>Counterfeit NFTs</strong>:  In March 2021, a counterfeit Beeple NFT sold for $1.3 million on the  NFT marketplace, Nifty Gateway. The buyer later discovered that the NFT  was fake, and was unable to recover their funds.</li><li><strong>Phishing scams</strong>:  In April 2021, a phishing scam targeted users of the NFT marketplace,  SuperRare. The scam involved fraudsters sending fake emails that  appeared to be from SuperRare, asking users to provide their private  keys.</li><li><strong>Investor scams</strong>:  In March 2021, a fake NFT project called &#34;Uniwhales&#34; appeared on the  NFT marketplace, OpenSea. The project was a scam, and the fraudster  disappeared with the funds raised from investors.</li></ol><h2 id="header-4">How to avoid NFT scams</h2><p>The  first thing to avoid NFT scams is to research the NFT project and team  before investing. Check the project&#39;s website, social media presence,  and whitepaper. Look for information about the team and their experience  in the industry. Be wary of any projects that have a vague or  incomplete description of their goals and objectives.</p><p>Also, stick to using reputable NFT marketplaces that have a track record of being <a href="https://choise.com/news/crypto-world/nft-security-issues-2023" rel="noopener noreferrer nofollow">secure and trustworthy</a>. Look for marketplaces that have a strong reputation and a large user base.</p><p>Be cautious when <a href="https://choise.com/news/tutorials/how-to-buy-nfts-2023" rel="noopener noreferrer nofollow">buying NFTs</a> that claim to be one-of-a-kind or <a href="https://choise.com/news/cho-token/discover-nto-what-is-rarity" rel="noopener noreferrer nofollow">rare</a>.  Look for verification from reputable third-party sources, such as the  NFT issuer or a trusted authenticity service. Be wary of any unsolicited  offers of free NFTs or investment opportunities. Scammers often use  these tactics to trick users into giving away their private keys or  personal information.</p><p>Always  use two-factor authentication to add an extra layer of security to your  NFT wallet. This can help protect your funds in case your private keys  are compromised. Keep your private keys secure and never share them with  anyone.</p><p>Last but not  least, don&#39;t invest more than you can afford to lose, and be cautious of  any projects that promise high returns or use aggressive marketing  tactics. Remember that NFTs are a speculative investment, and their  value can be volatile.<br /><br />Reaf full article here: <a href="" rel="noopener noreferrer nofollow">https://choise.com/news/tutorials/how-to-detect-nft-scams-2023</a><br /></p>

How to detect NFT scams

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