Key Takeaways
- NFT scams continue to rise as the industry gets more takers among celebrities
- OpenSea, the largest NFT platform admits to selling 80% junk and plagaerized works
- NFT trade surges $6 billion in January 2022
YEREVAN (CoinChapter.com)- It is a well-known fact by now that nonfungible tokens (NFTs) are the talk of the town. However, as more celebrities jump on the NFT bandwagon, the sector attracts fraudsters. It is not only artists and projects that make big bucks selling digital collectibles. NFT scams are rampant. What had become a boon for some artists and creators is now a nightmare for others.
It is not uncommon to find well-established artists complaining that their art has been stolen and turned into an NFT. Last year, artist and professional illustrator Derek Laufman issued an alert on Twitter that someone was selling his art as a nonfungible token. What shocked him most was that the imposter had managed to have the fake profile verified on Rarible.
“Apparently someone is selling my artwork on rareable. It’s 100% stolen and NOT me. Buyer beware,”
he warned.
Dutch artist Lois van Baarle had a similar experience when she stumbled on hundreds of her works on OpenSea. She had not ‘minted’ any of them, unfortunately. She could do little but send emails to the platform, briefing them about the situation and requesting that they take her works down. More often than not, her pleas fell to deaf ears.
“NFTs are supposedly about authenticity but these platforms (that’s you, @opensea) do less than the bare minimum when it comes to making sure that the images are being uploaded by their ORIGINAL CREATORS,”
she lashed out in a long Twitter thread.
Recommended: Another Scam: Solana NFT project Big Daddy Ape Club cons investors of $1.3M
OpenSea admits to selling a bunch of junk as NFT
As more people FOMO-buy into NFTs hoping to flip them for large profits, the concerns about authenticity are on the rise. Some tech-savvy grifters even deploy bots to steal art from websites and upload them on NFT platforms en-mass, making the process quick and fully automated.
To mint an NFT, the platform usually asks creators to pay a certain amount of Ethereum (ETH) fees for each token they generate. However, OpenSea came up with a ‘lazy minting’ feature to allow creators to list their NFTs for free. Unfortunately, because scammers began taking advantage of this feature, the platform decided to place a maximum cap of 50 NFTs for those opting for this feature. However, this was met with a backlash from the community, prompting OpenSea to withdraw the limit. They also issued an explanation for their initial decision.
“we’ve recently seen the misuse of this feature increase exponentially. Over 80% of the items created with this tool were plagiarized works, fake collections, and spam,”
OpenSea admitted.
However, scams are not limited to fake or plagiarized art. OpenSea is not the only platform where grifters have a field day.
Recently, ‘Big Daddy Ape Club,’ an NFT project on the Solana network, scammed investors of 9,136 SOL. In fiat currency, that amounts to almost $1.3 million.
Recommended: IreneDAO crosses $6M in NFT sales. Another scam?
NFT trading volumes cross $6 billion in January
Of course, as NFT scams infest the industry, they come as no surprise to industry insiders. Everything successful in the world has been forged or plagiarized, so NFT would not be immune to it. However, nonfungible tokens should be a new way to sell art and a better way to do it.
In December 2021, NFT trade volumes surged past the $4 billion mark, according to data from Trading Platform. Out of the entire amount, $3 billion came from OpenSea alone.
However, as 2022 opened and more people jumped on the craze, NFTs outperformed this number in just a month. According to The Block Research, NFT trading volume reached $6.13 billion in January 2022.
This parabolic rise in nonfungible tokens trades has prompted people to find ingenious ways to scam traders. The methods are endless, from creating fake NFT drops to sending phishing emails. Some have even gone as far as impersonating OpenSea to email fake purchase offers to holders. Spending 10 minutes on Twitter will help you realize how common sham technical supports are.
With so much going on, it has become imperative to double-check before buying NFTs. Most of the stuff you can buy today is worthless if they don’t come with proper utility, and if they are stolen art, well, you just bought junk.
