The Seven Most Common NFT Fraud Schemes

The Reality of Cryptocurrency Scams

Let's begin by addressing an uncomfortable truth. Just as with blockchain developments, cryptocurrency scams are nothing new. In short, wherever there is profit, illegal activity follows.

Non-fungible tokens (NFTs) have attracted record-setting capital inflows in recent years, cementing their place in mainstream economic discourse. Yet, as NFT popularity surged, so did counterfeit NFTs and NFT scams. Economic booms always bring both opportunities and risks.

NFTs have achieved mainstream adoption more successfully than perhaps any other blockchain-based concept. In recent years, the NFT market has seen hundreds of thousands of active buyers and sellers and roughly 185,000 original wallets created. Many of these users are newcomers to crypto, making them especially susceptible to scams.

Historical data shows global NFT sales have exceeded $4 billion, while “NFT scam” reached an all-time high in Google search volume. Unfortunately, scams are a persistent threat in all commercial transactions. It’s estimated that nearly $14 billion is lost annually to crypto scams, underscoring the scale of the problem.

Importantly, owning an image-based NFT does not grant actual ownership rights to the image itself. This means you cannot reproduce or use it commercially. Instead, you own a record of purchase on the blockchain. Someone else can acquire that purchase record as well.

Because of this, regulating the NFT market like the traditional art market is difficult. On the other hand, NFTs play a vital role in supporting digital artists by creating scarcity and granting buyers ownership of unique digital files.

Common NFT Scam Tactics

The “Evolved Apes” project, which launched 10,000 tokens, is among the most infamous NFT scams. This fake NFT project was prototypical for the industry. Cartoon ape designs—following the Bored Ape Yacht Club’s success—became a fixture in NFT collections.

Buyers received unique ape images, and the project promised a blockchain-based fighting game where apes could battle each other. Winners would receive crypto rewards, and NFT sales were supposedly funding the game's development.

However, the developer known as “Evil Ape” vanished immediately after selling the NFTs, taking with them 798 ETH (approximately $2.7 million at the time). Buyers had no recourse. The Evolved Apes game never materialized, and those who bought fake NFTs were left with a JPG as a memento of their investment.

Another high-profile scam was “Mercenary,” a medieval-themed NFT game featuring play-to-earn mechanics and a new crypto token called “Mercenary Gold.” The scammers behind Mercenary promoted the project on Twitter via crypto media, attracting significant attention.

But the project was a complete fraud. The team behind Mercenary Gold escaped with at least $760,000 through this NFT scam. Cases like this highlight why it’s crucial to thoroughly verify a project’s legitimacy before investing.

The Return of Ape Scams

Big Daddy Ape Club positioned itself as a parody of Bored Ape Yacht Club, masquerading as a more successful project. Ads suggested that celebrities like Jimmy Fallon and Paris Hilton were interested in Bored Ape Club, but in reality, none of these celebrities endorsed Big Daddy Ape Club.

The scammer behind Big Daddy Ape Club urged customers to mint fake NFTs for a premium of 1 Solana—about $135 at the time. Ultimately, participants couldn’t mint NFTs and only lost the Solana transaction fees.

This scam targeted over 9,041 victims and netted more than $1.3 million. The case is a textbook example of copycat scams mimicking well-known projects and demonstrates the importance of verifying authenticity.

NFT Pump-and-Dump Schemes

Sadly, pump-and-dump schemes have become a predictable pattern in crypto and NFT markets. Pump-and-dump schemes involve groups buying up NFTs or tokens to drive up prices artificially. Once values spike, the scammers sell off, leaving other investors with worthless assets.

Wash trading—where the same party buys and sells assets to themselves—is also common in crypto. This inflates trading volume and can artificially boost prices. Such manipulation often drives NFT prices far above real demand.

One early NFT success was CryptoKitties, a project on Ethereum that went viral after launch. One of its most popular cats sold for the equivalent of $155,000 in ETH. Six months later, prices had fallen by 95%.

So how do you avoid falling for fake NFT project scams? Start by reviewing the project’s transaction history and wallet records. Major NFT marketplaces allow you to check collection transactions and the total number of buyers. EtherScan lets you view all transactions on the Ethereum blockchain.

Also, follow projects on social media. Check their Twitter, join their Discord. Robust liquidity, artistic value, and a lasting community require active participation from investors and collectors.

NFT Art Theft

Fraudulent NFT scams are surging, and reports of NFT art theft are also on the rise. Scammers copy artists’ work, mint it as NFTs, and sell it to unsuspecting buyers.

DeviantArt, an online community with over 70 million members and more than 50 trillion artworks, has seen numerous artists report theft. DeviantArt has rolled out tools to monitor public blockchains and third-party marketplaces, warning members targeting NFT art scams. Historically, the platform has issued over 50,000 alerts regarding potential NFT violations.

Minting an artwork as an NFT is not the same as owning its intellectual property. With accessible software, anyone can turn images or photos into NFTs. Scammers easily steal artists’ work, set up fake accounts, and sell counterfeits. Once the community identifies the scam, the NFT becomes worthless. You also have no recourse for recovering lost funds.

Before buying NFTs from any marketplace, do your homework. On major NFT platforms, a blue checkmark next to an artist’s profile photo signifies verification. Use Twitter, websites, and other social media to verify an artist’s identity. Contact artists directly to check if the work is theirs and if the user profile is authentic. Also, use Discord channels to gather additional information.

Phishing Scams

To buy your first NFT, you’ll need to set up a crypto wallet. MetaMask is the most popular Ethereum wallet for NFT collectors.

Recently, MetaMask users have been targeted by phishing scams involving fake ads that solicit private wallet keys and 12-word seed phrases. Such phishing isn’t limited to MetaMask—malicious NFT pop-ups appear on Telegram, Discord, and other forums.

Phishing attacks can steal your personal information and drain your digital wallet. For example, Ozzy Osbourne’s “CryptoBatz” project was targeted. Just two days after the token’s launch, supporters fell victim to fake NFT phishing attacks. These scams drained crypto from wallets via links shared on the official project Twitter account.

How can you protect yourself? Secure your personal information at all costs. Seed phrases are required for hardware backups or wallet recovery. Never enter details into MetaMask or any other pop-up. Only use verified websites for crypto transactions, and never rely on pop-ups, links, or emails.

Never share your seed phrase with anyone. This is crypto security’s most fundamental rule.

Fake Crypto Influencers

NFTs became mainstream in part due to celebrity endorsements. These public figures benefit in various ways. However, NFT trading is online, and the public often lacks insight into project marketing. This scam type involves fake endorsements (imposters acting as agents). By the time people realize the so-called celebrity ambassadors aren’t involved, many have already lost their funds.

For instance, posts about rapper 6ix9ine’s infamous NFT Trollz collection drew attention online. Creating an avatar supposedly entitled holders to royalties, with 5% of each transaction paid to original Trollz token holders.

However, questions about legitimacy quickly surfaced. NFT Trollz promised $100,000 in donations to various charities, but many buyers reported that the donations never happened. Buyers claimed their royalty requests were ignored. None of the charity initiatives promised by the project ever began.

To avoid these scams, thoroughly research the project. Is the celebrity endorsement real? Does the project seem likely to deliver on its promises? Always seek official verification.

Auction Fraud

Bidding fraud is rampant in secondary NFT markets. This occurs when someone who has already purchased an NFT tries to resell it. After you list your NFT, a bidder may attempt to change the cryptocurrency used for payment. This is a red flag. $5 is not the same as 5 BTC—so be vigilant.

Double-check the currency and reject any offers below your minimum acceptable price. Before finalizing a sale, always confirm the currency and amount carefully.

Fraudulent Websites

It’s common for NFTs to disappear immediately after purchase on scam websites. This happens when there’s a mismatch between the blockchain smart contract and the actual artwork. On mainstream platforms, original works are purchased with cryptocurrencies like Ethereum via smart contracts.

These smart contracts are minted directly on the blockchain. While the contract is on-chain, the actual content is not stored in the smart contract. NFTs simply reference asset ownership, but the asset itself can be anything.

That’s why you must ensure that any centralized platform you use is trustworthy. Don’t end up just purchasing a link to an image. URLs can be changed at any time, potentially leaving you with nothing.

When buying NFTs, confirm you actually own a tangible or digital asset—such as a JPEG, MP3, or PDF—to avoid scams. Choose reputable platforms and ensure transaction transparency.

Technical Support Scams

This scam is far simpler than most fake NFT schemes. Scammers impersonate customer service reps for NFT projects, aiming to contact you and extract sensitive information. Many such scams occur on Discord, Telegram, or Reddit—popular forums for crypto enthusiasts. Sharing your wallet’s recovery phrase gives scammers access to all your assets.

If you receive a direct message from a project founder, treat it with extreme suspicion. Most NFT projects never contact users directly via Discord or Telegram. Only communicate through official support channels.

Exercise Caution When Purchasing NFTs

No one wants to miss out on the next breakthrough. This desire drives widespread interest in blockchain technology and NFTs. Naturally, people are eager to catch the next big thing.

Digital assets are real. But scammers know that many hope to get rich quickly. They prey on this instinct, using various tactics to profit from NFT marketplace participants.

You can avoid scams by staying vigilant. Only buy when you’re confident in the information. Always research the project. Most importantly, keep your personal information secure. Following these core principles will greatly reduce your NFT investment risks.

FAQ

What are the seven most common types of NFT scams?

The seven most common NFT scams are counterfeit marketplaces, fake NFTs, unauthorized transfers, investments in scam projects, phishing fraud, rug pulls, and celebrity impersonation. Stay vigilant against these methods.

How can you identify fake NFT projects and fraudulent official accounts?

Verify official websites and social media accounts. Check URLs carefully and use bookmarks. Official accounts feature a blue checkmark. Never click suspicious links or share private information.

What is “floor price manipulation” in NFT scams?

Scammers fabricate high transaction volumes to drive up NFT values and attract investors, then withdraw funds and vanish. This scam often involves fake platforms or wallets.

How can you avoid phishing attacks and scam websites when buying NFTs?

Always verify the official site’s URL and only buy from accounts with a blue checkmark. Avoid suspiciously low prices, enable two-factor authentication, and never share your private key. Use trusted platforms and always vet the creator’s credentials in advance.

What should you do if you buy a scam NFT or fall victim to fraud?

If you purchase a scam NFT, don’t interact with it. Immediately contact the platform’s customer support and consider reporting to law enforcement. Avoid further transactions.

Why are NFT smart contract audits and project due diligence important?

NFT smart contract audits and due diligence ensure code security and project transparency, protect against scams and vulnerabilities, and safeguard investors’ interests. Audit reports are the foundation of project credibility.

How do you distinguish legitimate NFT projects and trustworthy teams?

Review on-chain transaction history and research the project team’s credentials. Look for active community involvement and transparent white papers. Check the team’s track record with past projects.

What’s the difference between NFT scams and legitimate projects?

Legitimate projects are transparent, publish clear white papers, and disclose team information. Scam projects lack transparency and often spread false information. Legitimate projects are available on official marketplaces, while scams typically peddle illegal NFTs on counterfeit sites.