How to avoid Scams in the Cryptosphere
The NFT and Crypto world are great! Full of vibrant, fun and creative communities that we all love to take part in. Unfortunately, because of the novelty and complexity it all entails, it’s also become a place that sees many scammers, catfishers and more.
We want you and our communities to be safe, so that we can enjoy our passions and interests free of worry, so today we’re here to talk about the most common types of NFT and Crypto Scams and how to avoid them.
As with any Internet community, NFTs and Crypto groups have become wildly popular on Discord and other social media like Twitter and Instagram. That’s why Catfishers either creating fake projects or posing as popular accounts are very common.
You should always pay attention to the fine print in any following or invitation you receive regarding Crypto, the difference between a legit account and a scam could be a single letter.
This is the name given to a type of scam that’s unfortunately very common in the NFT space.
Scammers will create fake projects, coins or collections and pull large amounts of buyers in through hype and promises of money. However, once enough purchases have been made, all the promotion and any unfulfilled promises go away, causing the value to drop drastically.
The scammers then disappear from Social Media, having taken all the income from their userbase and leaving them with unsellable NFTs.
Pump & Dump
Similarly, a pump-and-dump scam works, with large groups buying massive amounts of their own NFTs or cryptocurrency to drive the price up for demand. This draws in a crowd of people looking to invest in a growing project.
However, once the price is pumped up, the group then sells (dumps) the NFT or coin, making the value drop instantly. The scammers leave with the gains, and everyone else loses out.
Like many old internet scams, Phishing works through phony advertisements, emails and pop-ups taking people to a fake website.
The website then requests users’ private wallet keys to gain access to their digital wallets. Once scammers get a hold of this private information, they can deplete any NFT collections or cryptocurrency in the digital wallet.
These types of scams happen a lot on bidding websites, where people try to resell their NFT.
The scammer in this case will place the highest bid on an NFT, once the time comes for them to pay, they switch out the cryptocurrency for one of lesser value.
How to stay safe
What we’ve listed here is only part of the wide array of scams and theft that can happen when you’re not careful on these online spaces, however, there are steps you can take to avoid falling victim to scammers.
To start with the basics: you should always use strong passwords and keep your keys private. This seems simple , but it goes a long way in protecting your privacy. Other tools like password administrators, two-factor-authentication, facial recognition or fingerprints can create an extra layer of security.
Beware of strange links and usernames, no matter how legit they look. Make sure to research by yourself NFT sellers and creators. If you’re interested in a site, it’s always safer to visit it directly and not click on any links. Be sure to also stay out of any trading sites that may look suspicious.
Always review direct messages and transaction histories around NFTs you’re interested in, be wary of NFTs that have many transactions on the same day. Before buying an NFT, cross-check their price on reputable sites like Mintable or OpenSea, prices that are much lower or much higher than they should be, are likely scams.
This may seem like a lot, but luckily there are many tools and networks that can help you stay safe within the Cryptosphere, and with a bit of effort we can make this a healthier community for everyone.
Until next time!