What is an NFT?
Odds are, you’ve probably heard the term “NFT” quite a bit lately, as their popularity has been surging quite a bit in the last few years. In fact, Google Trends notes that the search term “NFT” consistently rose throughout 2021, peaking in December of that year.
So, what is an NFT? Well, let’s start with the name. “NFT” is short for non-fungible token, and these tokens are what’s called a “cryptographic asset.”
Not to be confused with cryptocurrency, NFTs are unique assets that are bought and sold on a blockchain in a similar manner as cryptocurrency, but these tokens are used to represent a variety of physical or digital assets.
In the cryptocurrency world, money can be exchanged for bitcoin, and in that world a bitcoin that I own would be equal in value to the same number of bitcoins that you might own. The market may fluctuate, but the value of each coin is the same, creating consistency for digital transactions.
NFTs, on the other hand, are all unique and therefore the value of each token can be vastly different, depending on what it represents. What’s more, NFTs are irreplaceable. They cannot be reproduced.
As of this writing, one of the largest markets for NFTs centers on collectible items, like digital sports memorabilia, original artwork, gaming, real estate, and other sectors representing wholly unique assets. Each NFT has a distinct digital signature associated with it that represents who owns the asset.
How are people getting wrapped up in NFT scams?
The simplest way to describe it is that the NFT world is an incredibly new one, one where transactions representing millions of dollars are taking place, which, naturally, is catching the attention of people who also would like to sell or own assets worth millions of dollars.
Since this is such a new world for so many people, the literacy regarding how to safely buy and sell NFTs is still quite low, making the scene ripe for scams.
One of the most common places people are being victimized by NFT scams? Fraudulent NFT websites. If you’re searching for places to buy or sell NFTs, you’ll be overwhelmed by the number of results you receive, and if you don’t know a lot about the space, it’s pretty easy to confuse a legitimate site for a fake one.
The simplest way in which you can distinguish a fraudulent site for a legitimate one is based on the credentials that are being requested.
For many crypto-based transactions, you’ll be asked to supply your digital wallet address to complete the transaction. This allows buyers and sellers to safely exchange digital currencies for digital assets.
Fraudulent sites will ask you for your wallet address, but you’ll also be asked to provide the master key to your digital wallet. This master key, also known as the Ethereum wallet, will give access to everything in your digital wallet, allowing scammers to steal and transfer assets, or sometimes block you from ever accessing your digital wallet again. These transactions are mostly untraceable, leaving the victim at great financial loss with very little room for recourse.
There, of course, are many other scams that buyers and sellers can find themselves wrapped up in, including people making fraudulent offers on your existing NFTs, fake technical support via phishing emails and message boards, and more.
What should someone do if they find themselves wrapped up in an NFT scam?
If you believe that you’re the victim of an NFT scam, then you should contact the New Jersey State Police Cyber Crimes Unit. These sorts of crimes can be incredibly difficult to prosecute, due to the near-total anonymity of the transactions. However, the more information you can share with the authorities, the more sophisticated their investigations can be.
If you are someone who has been implicated in an NFT scam, then your first course of action should be to secure knowledgeable, effective legal counsel. The attorneys at the Law Offices of Robert J. DeGroot has a half-century of experience in defending our clients from unjust accusations.
We’re experts in defending clients accused of internet crimes, and we can defend you, too.
We’ll defend your rights with the skill and tenacity that you and your freedom deserves.
