In a significant crackdown on NFT scams, the Brooklyn District Attorney’s office has dismantled 40 fraudulent non-fungible token (NFT) marketplace websites. This follows the case of an 85-year-old artist who lost $135,000 in a scam involving a fake NFT marketplace.
The victim, an artist based in New York, was contacted on LinkedIn by a scammer posing as an art dealer. The scammer convinced the artist to mint his artwork on a fraudulent NFT marketplace that resembled the legitimate OpenSea platform. The scammer claimed the artist had earned $300,000 in profit from the sale. To access the funds, however, the artist was told he needed to pay a “fee” of $135,000.
Desperate to retrieve the promised funds, the artist borrowed money, liquidated his retirement savings, and used his credit cards to cover the cost. Unfortunately, he soon realized that the promised profits were a lie, leaving him devastated both emotionally and financially.
Investigation and Shutdown of Scam Sites
After discovering the scam, Brooklyn District Attorney Eric Gonzalez’s office launched an investigation, which led them to uncover a network of fraudulent websites targeting artists. The investigation traced the funds to an exchange in Nigeria, where they were primarily cashed out for Nigerian currency, making recovery efforts impossible.
The fake marketplaces, some of which were designed to look like well-known platforms such as OpenSea, were controlled and financed from Nigeria. In one case, visitors to these sites were prompted to input their crypto wallet seed phrase, potentially allowing scammers to drain users’ wallets.
The DA’s office has since shut down these domains, hoping to prevent future victims from falling into similar scams.
How to Protect Yourself from NFT Scams
The Brooklyn District Attorney’s office has issued a warning to artists and NFT buyers, emphasizing the importance of using reputable NFT marketplaces. They also stressed the risks associated with phishing attempts, where scammers create websites that closely resemble legitimate platforms.
To protect yourself, always be cautious when dealing with unfamiliar NFT platforms. Never reveal your crypto wallet seed phrase and, if something seems too good to be true, it probably is. Do your own research and seek advice from trusted sources before engaging in any NFT transactions.
Key Takeaways
- An 85-year-old artist lost $135,000 in an NFT scam involving a fake marketplace.
- The Brooklyn DA’s office shut down 40 fraudulent NFT sites involved in the scam.
- Investigations traced the funds to Nigeria, where they were cashed out in local currency.
- Artists and NFT buyers are advised to use reputable platforms and remain vigilant about phishing attempts.
