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The non-fungible token market started the new year bullishly, attracting traders, institutions, and businesses alike. The NFT frenzy has also attracted all sorts of scams. In this article, we shall assess five of the most common NFT scams and how you can protect your digital assets from these scams.

NFT Scams Are On The Rise This Year, 2024

In a January 18 blog post, Peckshield, a renowned blockchain security firm, confirmed that scammers had just stolen three non-fungible token collections, including Beanz #16149, Beanz #12,990 and Beanz #607 NFT collection, on Blur.io in a phishing attack.

Launched in late 2022, Blur.io is an Ethereum-based NFT marketplace that caters to professional traders with its innovative trading features, user-centric fee structure, and integration with various marketplaces. Since its inception, the platform has traded over $5 billion in trading volume.

Blur allows collectors to sweep NFTs across multiple marketplaces, snipe reveals faster than others, and manage their portfolios with advanced analytics. As the Blur NFT marketplace continues to gain traction, the number of scammers looking to lure investors has also increased. Below, we have listed five NFT scams and how investors can avoid them:

1. Phishing Scam

Phishing scams are the foremost internet security threat for your digital assets. In most phishing scams, scammers trick their victims into giving away vital security information by sending them fake links (phishing links) or emails that lead to malicious websites.

It’s worth noting that cryptocurrency wallets and marketplace accounts are the common points of contact between NFT owners and NFT scammers. In this context, collectors should avoid any suspicious links and unofficial links from sources they don’t trust.

2. Pump And Dump NFT Scam

Pump-and-dump is a scam involving social media influencers and celebrities building massive hype around an NFT project. Influencers can use well-crafted social media posts and teasing conversations to improve the internet presence of new and existing NFT projects.

Unfortunately, after the NFT floor prices reached a record high, crypto and NFT influencers sold their stake and backed out of the project. The hype dies down, and the value plummets. Investors rush to sell off their NFTs against shrinking liquidity. In most cases, the pumps and dump scam leaves investors holding worthless investments. This can be avoided by doing due diligence on an NFT project before seeding your funds.

3. Rug Pulls NFT Scam

A rug-pull is a form of scam where crypto developers hype an NFT but pull out after receiving substantial funds from investors. These crooked developers often use social media to build trust and fanfare around their NFT while waiting for investor funds to pour in. After garnering enough, they shut down the entire project. Again, conducting due diligence on a project and its developers is highly recommended.

4. Plagiarized NFTs

At the very core, NFTs are about creating unique digital tokens. Unfortunately, digital media can be duplicated beyond the creators’ unique identity, and its fake prototype gets sold as an NFT. In this case, investors can buy a fake NFT collection instead of the original. Crypto traders should verify an NFT before making a purchase.

5. Impersonation

Impersonation is a new phishing scam where fraudsters pose as customer support agents for an NFT marketplace. In most cases, fraudsters typically contact users through social media channels like Discord, Telegram or Twitter with an issue regarding their account. In this case, collectors should only interact with the official Discord to avoid giving their account details to a fraudster.

Related NFT News:

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