Comprehensive Guide to NFT Scams: Types, Cases, and Protection Strategies

The State of Crypto Scams

Crypto scams have become an inevitable reality in the blockchain ecosystem, and NFTs are no exception. Illegal activities emerge wherever significant profits can be made, and the NFT space has proven particularly attractive to fraudsters due to its rapid mainstream adoption.

In recent years, non-fungible tokens entered the mainstream economic lexicon with unprecedented momentum, attracting record-breaking investment flows. This explosive growth, however, created fertile ground for scammers. The NFT market saw approximately 280,000 buyers and sellers with around 185,000 unique wallets participating in transactions. Many of these participants were newcomers to cryptocurrency, making them particularly vulnerable to fraudulent schemes.

Global NFT sales surged to over $4 billion during peak periods, while Google searches for "NFT scam" reached all-time highs. The correlation between market growth and scam activity is undeniable. Financial prosperity breeds opportunities, but also significant risks. Nearly $14 billion has been lost to crypto scams annually, highlighting the scale of this challenge.

Understanding the nature of NFT ownership is crucial for protection. An NFT containing an image does not grant you actual ownership of that image itself. You cannot reproduce it or use it commercially without additional rights. Instead, you are purchasing ownership of the record of your transaction on the blockchain. This fundamental distinction makes the NFT market difficult to regulate in the same way as traditional art markets.

In physical art markets, stealing a Van Gogh painting attracts severe legal penalties, and art dealers exclusively seek originals. The classic art world operates within a small, tightly-knit community with established authentication processes. NFTs, by contrast, exist in a decentralized digital environment where verification and recourse mechanisms are still developing.

Despite these challenges, NFTs can genuinely support digital artists by creating scarcity and allowing buyers to own unique digital files. However, addressing critical issues remains paramount, including the resource cost of blockchain transactions and the proliferation of scams and fraudulent schemes. By better understanding these threats, participants can learn to protect themselves effectively.

Notable NFT Scam Cases

Several high-profile NFT scams have captured public attention, illustrating the various tactics employed by fraudsters in this space.

The release of 10,000 "Evolved Apes" NFTs represents one of the most infamous rug pull scams in NFT history. This project followed a common pattern in the NFT space, featuring cartoonified ape designs similar to the successful Bored Ape Yacht Club. Buyers received unique ape designs that were supposedly usable in a proposed blockchain-based fighting game where apes could battle each other for cryptocurrency rewards.

The developer, operating under the pseudonym "Evil Ape," disappeared shortly after selling the NFTs, having earned 798 Ethereum (approximately $2.7 million at that time). Purchasers had no recourse to recover their investments. The promised Evolved Apes game never existed, leaving buyers with nothing but a JPG file as a souvenir of their failed investment.

Another significant scam involved Mercenary, a medieval-themed NFT game project promising play-to-earn features and a new cryptocurrency token called Mercenary Gold. The scammers invested in Twitter advertising through crypto news outlets, successfully generating substantial interest in the project.

The entire venture proved to be an elaborate hoax. The individuals behind Mercenary Gold disappeared with at least $760,000 from their NFT scam. They were also suspected of involvement in other fraudulent schemes. The project owners removed themselves from all social media platforms and vanished completely.

Additional Ape-Themed Scams

The success of legitimate ape-themed NFT projects spawned numerous copycat scams.

Big Daddy Ape Club appeared to be a parody of the successful Bored Ape Yacht Club project. While celebrities like Jimmy Fallon and Paris Hilton had expressed interest in Bored Ape Yacht Club, none endorsed Big Daddy Ape Club, despite what misleading advertising suggested.

Scammers behind Big Daddy Ape Club convinced customers to "mint" their NFTs for a premium price of 1 Solana (approximately $135 at that time). However, the NFTs could never actually be minted, though the Solana transaction fee would still be deducted from buyers' wallets.

This NFT scam targeted over 9,041 people, netting the fraudsters more than $1.3 million. Analysis from SolRarity indicated this wasn't the first scam perpetrated by this group. Wallet activity suggested this was likely the third fraud committed by the same individual or group behind Big Daddy Ape Club.

NFT Pump-and-Dump Schemes

Pump-and-dump schemes have become disturbingly predictable in both cryptocurrency and NFT markets. These schemes involve coordinated groups buying up NFTs or currency to artificially inflate demand. After successfully driving prices higher, the scammers sell off their holdings at peak prices, leaving other investors holding worthless assets.

Wash trading represents another common manipulation tactic in NFT markets. This involves the same person or entity buying and selling the same assets repeatedly to create the illusion of high demand and trading volume. The artificially inflated prices attract naive traders who believe they're witnessing genuine market interest or securing an exceptional deal.

Even prominent NFT projects have faced pump-and-dump accusations. The Athletic alleged that members of SoRare NFTs football player teams purchased NFTs specifically to generate artificial interest and inflate prices. Similarly, the record-breaking sale of Beeple's digital artwork faced scrutiny, with various publications alleging that the buyer, known by the pseudonym Metakovan, purchased the work to finance a pump-and-dump scheme involving their own B.20 token.

Large Projects Aren't Immune

Even established NFT projects can experience dramatic price collapses that resemble pump-and-dump patterns. CryptoKitties, one of the earliest NFT applications built on the Ethereum blockchain, achieved massive popularity following their launch in late 2017. One of the most sought-after cats sold for $155,000 worth of Ethereum. However, six months later, prices had plummeted by 95%, leaving many investors with significant losses.

Protection Strategies

To avoid falling victim to pump-and-dump schemes, investors should thoroughly check the history and wallet records for any project. Platforms like OpenSea and other NFT marketplaces allow users to view the total number of transactions and unique buyers for NFT collections. EtherScan enables examination of all transactions on the Ethereum blockchain, providing transparency into trading patterns.

Additionally, following projects on social media is essential. Check their Twitter presence and join their Discord server to gauge community engagement. A legitimate project should have numerous genuine investors and collectors, ensuring good liquidity, artistic value, and a sustainable long-term community.

Plagiarized NFTs

Plagiarized NFT scams have become increasingly prevalent as the market has grown. Artists frequently report having their work copied, converted into NFTs, and sold to unsuspecting buyers who believe they're purchasing authentic pieces.

DeviantArt, a popular online community with over 70 million members and hundreds of billions of artworks, has become a common source for art theft. Numerous artists have reported being victims of NFT plagiarism. In response, DeviantArt launched a specialized tool to scan public blockchains and third-party marketplaces, alerting members to possible copyright violations. Since its launch, the tool has sent over 50,000 alerts about potential NFT violations.

NFTs and Intellectual Property Rights

Understanding intellectual property rights in the NFT context is crucial. Minting an artwork as an NFT does not automatically grant you intellectual property rights to that artwork. Platforms like OpenSea offer user-friendly software that allows anyone to convert any image or photo into an NFT, making it easy for scammers to steal artists' work.

Bad actors can easily create fake OpenSea accounts where they sell counterfeit artwork. If the community discovers this fraudulent activity, your NFT becomes worthless. Furthermore, recovering your investment becomes virtually impossible once the scam is exposed.

Verification Strategies

Thorough research before purchasing NFTs from any marketplace is essential. The blue checkmark next to an artist's profile picture on OpenSea and other NFT marketplaces indicates verified status. However, additional verification steps are recommended.

Find the artist through their official Twitter account, personal website, or other social media channels. Contact the artist directly to confirm that the artwork is theirs and that they're using the correct user profile. Engage with other community members in Discord channels to verify information and authenticate the seller's legitimacy.

Phishing Scams

Phishing scams represent one of the most dangerous threats to NFT collectors, as they directly target access to your digital assets.

To purchase your first NFT, you'll need to sign up for a cryptocurrency wallet. MetaMask has become the most popular Ethereum wallet for collecting NFTs, making it a prime target for phishing attacks.

MetaMask customers have been targeted in sophisticated phishing scams involving fraudulent advertisements requesting private wallet keys and 12-word security phrases. These aren't isolated incidents—fake NFT malicious pop-ups also circulate through Telegram, Discord, and other public forums frequented by NFT enthusiasts.

Successful phishing attacks can obtain your personal information and completely drain your digital wallet. A notable example involved Ozzy Osbourne's "CryptoBatz," a collection of 9,666 digital bats. Just two days after tokens were issued, supporters became targets of an elaborate phishing scam. The attack drained cryptocurrency from wallets using a malicious link that appeared to come from the official Twitter account of the NFT project.

Protection Measures

Protecting yourself from phishing scams requires strict adherence to security practices. Keep your private information absolutely private. Your seed phrase should only be used to create hardware backups of your crypto wallet or to recover your wallet in legitimate circumstances. Never enter your seed phrase in any MetaMask popup or similar interface.

For any cryptocurrency transactions, always navigate directly to verified websites. Never use pop-ups, links from emails, or direct messages. Most importantly, never give out your seed phrases to anyone under any circumstances. Legitimate services will never ask for this information.

Fake Crypto Influencers

The popularity of NFTs has attracted numerous celebrity endorsements, with celebrities profiting in various ways from their involvement. However, the online nature of NFT trades means the public has limited information about the authenticity of marketing campaigns. Certain scams involve completely fabricated celebrity endorsements, and many people lose money before discovering that the supposed celebrity brand ambassador isn't actually involved.

In late 2021, social media posts generated significant interest in rapper 6ix9ine's NFT Trollz collection. The project claimed that avatar creation would provide royalties to NFT holders, with 5% returned to original Trollz token owners on every subsequent trade.

Questions about legitimacy emerged immediately. The project claimed that $100,000 would be donated to various charities. Many buyers now assert that none of these promises materialized. The discussed royalties never appeared, and none of the philanthropic work that the project promised ever began.

Verification Approach

To avoid these scams, thorough research into any project is essential. Verify that celebrity endorsements are genuine by checking official social media accounts and press releases. Assess whether the project is likely to fulfill its promises based on the team's track record, transparency, and community engagement.

Outbidding Scams

Outbidding scams most commonly occur in the secondary market when someone has already purchased an NFT and is attempting to resell it. These scams involve bidders attempting to change the cryptocurrency used for payment after you've listed your NFT for sale.

This currency switching represents a major red flag. The value difference between currencies can be enormous—$5 is obviously not equivalent to 5 BTC. Scammers exploit sellers' excitement about receiving bids, hoping they won't notice the currency change.

Prevention

Always double-check the currency specified in any offer and refuse to accept offers lower than your minimum acceptable price. Review all transaction details carefully before accepting any bid, regardless of how attractive it initially appears.

Scam Websites

Scam websites represent a sophisticated threat where purchased NFTs effectively disappear because the contract existing on the blockchain differs from the actual artwork.

When you upload original art onto platforms like OpenSea, it gets purchased using cryptocurrency such as Ethereum through a smart contract. The smart contract itself is what gets minted on the blockchain—not the actual content. NFTs only represent ownership of assets; the asset itself can be anything and may be stored separately.

This technical structure creates vulnerability. If you purchase an NFT from an untrustworthy centralized platform, you might simply be buying a link to an image. The content stored at that URL can be changed at any time, potentially leaving the buyer with nothing of value.

Protection Strategy

When purchasing an NFT, ensure that you also receive the tangible or digital asset itself, such as a JPEG, MP3, or PDF file. Verify that the platform you're using is trustworthy and has established mechanisms for content preservation.

Technical Support Scams

Unlike most NFT scams that involve complex schemes, technical support scams are relatively straightforward but nonetheless effective. These scams involve fraudsters masquerading as customer service executives for various NFT projects.

The scammer's goal is to establish contact with you and then request sensitive personal information. Many of these scams occur on Discord, Telegram, or Reddit—forums that are extremely popular with cryptocurrency supporters. Providing your wallet's security phrase to these imposters can result in the complete loss of all assets in your wallet.

Identifying Fake Support

If you receive direct messages claiming to be from project founders, approach these communications with extreme skepticism. The majority of legitimate NFT projects do not contact users directly through platforms like Discord or Telegram for support issues. Official support typically occurs through verified channels on the project's official website.

Pay Close Attention When Buying NFTs

Nobody wants to miss out on potentially revolutionary technology or investment opportunities. Blockchain technology and NFTs attract interest precisely because people don't want to miss the proverbial next big thing. Cryptocurrency fortunes do exist, and success stories circulate widely.

However, scammers are acutely aware of how many people hope to become the next crypto success story. They deliberately exploit these instincts, using various psychological tricks and technical deceptions to profit from participants in the NFT marketplace.

You can certainly avoid scams by following fundamental principles. Always exercise caution and skepticism. Make purchases only when you're certain of the information you've gathered. Conduct thorough research on every project before committing funds. Most importantly, maintain strict security over your personal information, private keys, and seed phrases. These simple practices can protect you from the vast majority of NFT scams.

FAQ

What are the 7 most common NFT scam methods?

The seven common NFT scams are: fake projects, phishing attacks, pump-and-dump schemes, celebrity impersonation, art theft, counterfeit NFTs, and unauthorized transfers. Stay vigilant and verify project authenticity before purchasing.

How to identify fake NFT projects and fraudulent NFT transactions?

Verify project background and official websites, check smart contract addresses on blockchain, review transaction history, avoid private messages from project teams, and only transact on trusted platforms. Never share private keys or sensitive information.

What security measures should you take when buying NFTs to prevent fraud?

Never share your private keys or passwords. Verify seller authenticity through official badges. Use established platforms with security features. Double-check URLs to avoid phishing. Research projects thoroughly before purchasing.

遭遇NFT诈骗后应该如何处理和举报？

Immediately contact your wallet support and report the fraudulent site. Save all transaction records and evidence for investigation. Change your passwords and security credentials promptly to prevent further unauthorized access.

What are NFT floor price manipulation and fake trading volume scams?

NFT floor price manipulation involves creating fake transactions to artificially inflate NFT values. Fake trading volume scams use fraudulent trades to deceive the market and mislead investors about actual demand and liquidity.

How to verify the authenticity of NFT projects and the legitimacy of development teams?

Research the project whitepaper, verify blockchain transaction history, check team members' online presence and social media credibility, examine Twitter account creation dates, review the roadmap's feasibility, and cross-reference the NFT across multiple platforms using block explorers.

What is the difference between NFT smart contract vulnerability scams and phishing website scams?

NFT smart contract vulnerability scams exploit code flaws to steal assets, while phishing scams deceive users into revealing private keys through fake websites. The former targets contract code, the latter targets user credentials.