How to stay safe in the NFT space
Whether you are new in crypto or are somewhat seasoned you can still fall prey to scams if you are not careful. One wrong move could turn into a bad investment or risk losing all of your crypto assets. In this section, we will discuss the common methods used in crypto scams, how to avoid them, and protect your assets from being stolen. It’s an unfortunate dark side to this wonderful community, but if we do our best to educate one another and aid each other in avoiding them, I believe the risk of falling for any sort of fraud can be minimized and/or eliminated. That is one of the “missions” we gave ourselves.
So what are the various ways a scam artist can try to con you and how to protect yourself?
Contents:
Secret Recovery Phrase
The secret recovery phrase, also known as the secret phrase or seed phrase, is incredibly important to keeping your crypto/NFT wallet secure. This is a unique 12-word phrase that grants you access to your wallet.
Hopefully, you’ve heard this before, but never, under any circumstances, give anyone access to your secret phrase. With this phrase, anyone can access anything in your wallet, and transfer it all out. If a scammer got access to it, you might as well say goodbye to everything you’ve got in there.
There are very few times you should need to use your secret phrase. That is to:
- recover your account (maybe you forgot the password and need to use the phrase)
- need to import your account (perhaps from phone to computer or vice-versa)
The bottom line is that no website should ask you for your secret recovery phrase. If one does, then they are most likely trying to scam you.
If someone claims to be staff from a wallet, NFT project, NFT marketplace will ask you for your phrase. If they do, they’re also trying to scam you.
The best way to save a secret phrase is to store it on a piece of paper in a secure location, such as a safe, somewhere only accessible to you, or in a secure password manager. If it is lost, it can never be recovered.
Imposters/Posers
Another common scam is people who pose as official projects. Scammers will set up accounts on NFT marketplaces, on social media, or create a fake website that mimics those of legitimate NFT projects. These will often lack a verification check-mark, may include the word “OFFICIAL” or some similar word, and will sometimes lack the official logo of the group.
For fake websites, the catch is usually in the spelling. These prey on typos and slip-ups, where people enter in the wrong URL or click on the wrong search result. Just an extra second of diligence spent checking the URL you’ve entered in or clicked on could save you both time and money. Always ensure that the website you are on is the real deal. It’s easier than one would think to set up a convincing fake website.
People may also set up websites that mimic popular NFT marketplaces, so be aware of those and use the same caution you would when looking into projects.
Always research projects before buying in. Just knowing a little bit about a group — their name/logo/brand profile, who is behind the project, etc, can go a long way in keeping you from falling for a fake.
Additionally, it’s not always big projects that are targeted. Sometimes people will take art from an artist and mint it as their own for a low price. Rule of thumb here — if it looks too good to be true, it probably is, but if you want to pursue it anyways on the possibility that it’s legit. Be prepared to do lots of research.
Rug Pulls
A rug pull is a situation where the creators of a project get money from investors, and then run off with it. This may look like people buying a bunch of NFTs from a project, and then the creators ghosting the community. It can be easy to be pulled in by a project, jump on the hype train, and buy-in, but just like the previous scam, this one can often be avoided simply by researching.
Look into things such as what the project is about — if you can’t find any information there, then that’s a big red flag — who the founders are, if they are on social media, etc. Having a roadmap is also a good sign, some projects may have white papers, etc. All in all, just don’t rush into anything. If someone makes you feel like you are on a tight schedule to buy into something, ignore them. It’s better to take your time and keep yourself safe than to rush into something and waste a bunch of crypto in the process.
Discord DM’s (Direct Messages)
If you’re involved in an NFT Discord, it’s more likely that you’ll receive an invite from a random member there. Sometimes it’s a legitimate invite to an NFT projects server, other times it’s a scam. It may come in the form of a fake giveaway, an invitation to a website, etc. All in all, my advice here is simple. Ignore these invites.
Every giveaway/invitation will be vague, and too good to be true. Most of them have suspicious links.
Invites to projects are trickier. You won’t know if these are something off or not. The only way to really know is to research them. Find them on marketplaces, look for their social media, etc.
Bidding
When bidding, sometimes people will switch currencies, and bid with something of lesser value.
For example, they may use the US dollar. Maybe it will show up as a 1.25 bid on the marketplace, which would be a lot more in ETH or Bitcoin. If you move quickly, it could be easy to not notice the difference in currency and accept the bid, only to realize all you’ve made is a dollar and some cents, so just stay aware and pay attention to details as you sell pieces.
All in all, do your own research and keep your eyes open. Don’t rush into anything, take your time, and learn as you go. Scams are present in any online space, but if we take a moment to look things over carefully, we can protect ourselves from them. It is up to all of us to weed out the bad seeds that will give a bad reputation to this amazing space. So please share your knowledge with others, help them protect themselves as well. If you find this article helpful please share it as well.
Remember, don’t trust. Verify. Happy collecting!
