Cyber Alert: 10 NFT Scams That Could Harm Your Brand

If you’re thinking about starting a marketing campaign with NFTs, below is a list of NFT scams that could potentially damage a business’ reputation by targeting unwitting consumers
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Non-Fungible Tokens (NFTs) are exploding massively in popularity and commercial viability that scammers are quick to take advantage of the hype. So if you’re thinking about starting a marketing campaign with NFTs, below is a list of NFT scams that could potentially damage a business’ reputation by targeting unwitting consumers. First, let’s understand the basics of NFT and what it could mean for your brand.

 

What are NFTs?

NFTs are digital assets that come in a variety of media formats like artwork, GIFs, music, video game items, collectibles, memes, virtual fashion, and more. NFTs help creators to include a string of code into their works so that they can share them without fear of piracy and also guarantee that they will be paid directly by their supporters and fans through royalties and sales.

 

What can NFTs do for brands?

Brands launch NFT projects to build a highly engaged community online, using them for marketing campaigns, promotional tools and customer loyalty programs. For example, Adidas sold $23 million worth of NFTs in less than a day after a limited drop of new shoes. Similarly, Time magazine launched an NFT project that leverages the publication’s deep history to drive digital subscription sales.

 

Is it safe for brands to experiment with NFTs?

NFTs represent a great opportunity for brands to create a huge online fan base that’s ready, willing and able to spend. Some experts even predict that NFTs will be the key digital point-of-sale for consumers in the near future. The possibilities are exciting and perhaps in a few months, NFTs will be mostly safe but it is still in its early stage.

 

What are the risks involved with NFTs?

Since it’s a relatively new technology, the successful foray into NFTs by companies is still few and far between. There are more risks and failures than there are opportunities, for example, the lack of regulation of the NFT market makes it vulnerable for all types of scams. In fact, companies like Adobe are still developing authentication stamps to verify the legitimacy of an NFT.

 

The 10 Most Common NFT Scams You Need To Know

1. Social Media DMs and Message Boards

Cybercriminals might try to reach users by sending messages on Twitter and Discord for example, where they try to engage them in a friendly chat, duping users into believing that they’re actually being contacted by your representative or influencer. Scammers then try to sell fake NFT opportunities to users on these social media message boards using your brand.


2. Phishing Sites

By copying websites and apps of perfectly legitimate brands, fraudsters publish replicas of NFT marketplaces and fake crypto wallets and then share them on social media, message boards as well as via email. The level of resemblance with the real company’s site is impressive, and it takes a keen eye to spot small differences in the URL or general layout.


3. Social Media Impersonation

An NFT scammer sets up a social media group or website using the name of a brand. They then sell fake or non-existent NFTs to people or use a fake NFT as a lure to swipe someone’s credentials. 

 

4. Counterfeit NFTs

This happens when scammers steal a brand’s NFT and then sell it at an NFT marketplace where they list the counterfeit artwork for auction.  Unsuspecting buyers will then bid to purchase an NFT that has no value.


5. Unprotected Marketplaces

In the short span that NFTs have existed, more than 150 marketplaces have sprung up and many lack the security needed to stop attackers. In one scam, attackers targeted marketplace users lacking two-factor authentication and used smart contracts to transfer ownership to their accounts. 


6. Untraceable Transactions

It is the nature of NFTs and cryptocurrencies to be untraceable and even harder to reverse. In addition to circumventing tax, such transactions are rife for illegal activities for cybercriminals to exploit. By the time a company, artist or celebrity realizes that something is amiss, the money is safely in the cybercriminal’s bank account. 


7. Cryptocurrency Scams

Crypto is the key currency in NFT transactions and cryptocurrency scams are incredibly common. This is especially the case around highly anticipated NFT releases that could set off a buying frenzy. During the sale, scammers create scam-minting sites that request users’ private wallet keys. Loyal customers falling victim to such a scam could damage a brand’s reputation for good.


8. Text or Email Scams

A cybercriminal sends a malicious email notifying a person of “suspicious behavior” on one of their accounts. As that person logs in and enters their credentials, they are asked for their private wallet keys or 12-word security seed phrases. The scammers then use those credentials to hack into the user’s digital wallet and deplete all of the crypto and NFTs stored therein. 


9. Customer Support Impersonation

A variation of the phishing scam where hackers will pose as customer support staff and reach out to unsuspecting buyers. NFT scammers will act as if they’re trying to resolve issues and then lead the customer to a fake link and official-looking websites to get their personal information and access to cryptocurrency wallets.


10. NFT Giveaways or Airdrop Scams

Here scammers pose as your brand to promote NFT giveaway campaigns also known as airdrop scams. The scammers will offer your consumers a free NFT if they spread your message and sign up on your website. They then prompt your consumers to link their metamask wallet credentials to receive your prize, and steal a library of NFTs after gaining access to their account.

 

Secure Your Digital Assets 

Companies could play with emerging technologies like NFT and skyrocket their brand’s success with the right cybersecurity partner. As providers of end-to-end IT solutions, UDT can install, configure, integrate, test, and train your staff for the adoption of any technology you need to implement.

Many business owners start to think about securing their digital assets after an attempt of theft, sabotage or infringement. By then, it’s already too late. Ensure the longevity of your brand by investing in a comprehensive protection program that can monitor many marketplaces and platforms for keywords and images simultaneously, analyze potential threats, detect phishing, and discover online brand abuse, copyright infringements and counterfeit sales.

Focus time, money, and effort on what really matters

Let’s build success together. 

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