Common NFT Scams to Avoid

As the NFT space continues to grow, so do the methods used by malicious actors to exploit unsuspecting participants. While the innovation behind blockchain technology has given rise to new digital economies, it has also birthed a surge of fraudulent schemes targeting newcomers and veterans alike.

This article serves as a comprehensive guide to help users recognize, avoid, and understand common NFT scams—ranging from technically sophisticated hacks to elaborate multi-level marketing (MLM) schemes disguised as legitimate investments.

1. Rug Pulls – When Creators Vanish with the Funds

One of the most infamous forms of NFT fraud is the rug pull, a scam where the creators of an NFT project abruptly disappear after collecting substantial investments from buyers.

How It Works:

A flashy project with appealing art, a roadmap, and fake team credentials is launched.
Social media influencers are paid to promote the project.
Investors rush in to mint NFTs with the expectation of rising value.
Within days or weeks, the team deletes all accounts and absconds with the funds.

Red Flags:

Anonymous or unverifiable team members.
Unrealistic promises of guaranteed returns or price floors.
Lack of code audits for smart contracts.

2. Phishing Attacks – The Digital Trapdoor

Phishing in the NFT world often involves tricking users into giving up their private keys, seed phrases, or wallet access.

How It Happens:

Fake websites resembling OpenSea or MetaMask prompt users to “log in.”
Direct messages on Discord from “support” agents offering help.
Twitter replies with malicious links promising free airdrops.

Once you enter your wallet information or sign a malicious transaction, your NFTs and funds can be stolen instantly.

Prevention Tips:

Never share your seed phrase.
Verify official URLs—don’t click links from unknown sources.
Enable two-factor authentication (2FA) on connected services.

3. Fake Marketplaces and Impersonation Scams

Fraudulent websites impersonate legitimate NFT marketplaces or wallets to trick users into fraudulent transactions.

Tactics Include:

Copycat domains (e.g., openseaa.io or metmask.com).
Fake NFT listings with near-identical artwork but no ownership.
Google Ads that rank scam sites higher than real ones.

How to Protect Yourself:

Bookmark official websites.
Use a browser extension like MetaMask’s “Phishing Detector.”
Confirm contract addresses before buying NFTs.

4. Pump-and-Dump Schemes

These schemes involve artificially inflating the price of an NFT collection through coordinated buying, only for the orchestrators to sell at the peak and leave others with worthless assets.

Warning Signs:

Sudden, unexplained spikes in trading volume.
Hype driven solely by social media bots or influencers.
No utility, roadmap, or community foundation.

These are not only financially harmful but can sometimes violate securities laws in various jurisdictions due to the manipulation of perceived asset value.

5. Fake Airdrops and Giveaways

Many scammers exploit the desire for free NFTs or tokens by sending users malicious links to “claim” airdrops. These links often:

Ask for wallet connection.
Request you to sign a transaction that grants them full control.
Disguise minting fees as authorization steps.

Always Remember:

Airdrops never require your private key.
Real airdrops usually involve registering via a whitelist or holding a qualifying NFT/token.

6. Discord Scams & Social Engineering

Discord is a hotbed for scammers due to its use in Web3 communities.

Examples:

Impersonation of team admins.
DMing new users with fake “urgent alerts.”
Sharing malicious minting links under the guise of pre-sale access.

Scammers rely on emotional manipulation: fear of missing out (FOMO), urgency, and trust.

7. Counterfeit NFTs – The Digital Forgery

Scammers steal art from online artists and mint it as NFTs without the creator’s consent.

Risks to Buyers:

Legal uncertainty over ownership.
Takedown by marketplaces upon copyright claim.
Resale value becomes zero once proven fake.

How to Verify:

Check the creator’s social media or official site.
Review the NFT’s minting history.
Use verification tools like OpenSea’s blue checkmark or project Discords.

8. Smart Contract Exploits

Some NFTs are encoded with malicious smart contracts that can:

Drain your wallet when interacted with.
Change metadata post-sale to show inappropriate or blank images.
Lock NFTs into inaccessible states.

Always interact with verified contracts. If you’re unsure, consult blockchain auditors or trusted community members before minting.

9. Insider Trading and Wash Trading

Wash trading is the practice of repeatedly buying and selling an NFT to artificially inflate its value and create the illusion of high demand.

Insider trading in NFT projects occurs when team members use unreleased information to profit from upcoming announcements or minting details.

These practices not only distort the market but can lead to legal consequences under anti-fraud or consumer protection laws in multiple jurisdictions.

10. Multi-Level Marketing (MLM) Scams Disguised as NFT Projects

Not all NFT scams are direct thefts. Some adopt the structure of a pyramid scheme or MLM (multi-level marketing), luring investors with commissions for recruiting others.

Typical Structure:

You buy an “NFT” that promises passive income.
You are incentivized to refer others and earn from their purchases.
Actual utility or art is irrelevant; the model depends on new entrants.

Why This Is Dangerous:

These are Ponzi-like structures where early users are paid with new money.
Once new participants stop joining, the system collapses.
You may be held legally accountable for promoting or profiting from an unregistered investment scheme.

Warning Signs:

Tiered commissions for recruiting.
Guaranteed returns not tied to any real utility.
Little to no transparency on smart contract or minting details.

11. “Unlock Content” and Stealth Hacks

Some NFT platforms offer an “unlockable content” feature post-mint. Scammers exploit this by:

Embedding dangerous links or phishing files.
Offering false promises of bonus drops or game access.
Tricking users into downloading wallet-draining apps.

Pro Tip: Never download files or apps from unknown sources claiming to be NFT utilities. Stick to browser-based tools and audit any smart contract interaction.

13. Wallet Drainers in Code or QR Format

Some scammers embed malicious signing requests in JavaScript code or dynamic QR codes, especially in “free mint” websites or advertisements. Signing even once can empty your wallet.

Avoid:

Connecting wallet to unknown platforms.
Scanning QR codes without verifying their source.
Signing transactions you don’t fully understand.

14. AI-Generated Scams and Deepfake Identity Theft

In advanced cases, scammers use AI-generated images and bios to impersonate founders or influencers. Others may deepfake video testimonials or KYC documents to appear trustworthy.

Due Diligence:

Cross-verify faces, voices, and bios across multiple sources.
Ask questions in project communities.
Use reverse image search or facial recognition to detect fakes.

Final Thoughts: How to Stay Safe in the NFT Space

The NFT ecosystem is still in its early stages and rapidly evolving. While decentralization offers autonomy, it also removes many of the safety nets that exist in traditional finance. Here’s how to stay vigilant:

Checklist for Safety

Always verify smart contract addresses.
Never share your seed phrase.
Use hardware wallets for high-value NFTs.
Join verified project channels; avoid DMs from strangers.
Avoid “guaranteed” returns or affiliate schemes.

By understanding these deceptive practices and recognizing their signs, you can participate in the NFT space more safely and confidently. Always do your own research (DYOR), and when in doubt—don’t sign, click, or buy.