HMRC act on NFT fraud: Expert reveals how to look out for scams

The popularity of NFTs are on the rise, but so are NFT scams and fraud. HMRC seized NFT for the first time and three people have been arrested on suspicion of attempting a fraud of £1.4 million involving 250 alleged fake companies.

Adam Morris, co-founder at NFT Club, commented on how to look out for NFT fraud and scams:

“Investors need to always be vigilant, as people are getting pretty smart with the sorts of scams they come up with. And with the UK tax authority reporting the first NFT fraud case in the country, British investors need to be aware of how to look out for scams and how to avoid falling for them.

“Scammers look for individuals who are interested in NFTs or new to the market. They usually join Discord servers and mass-message their members, DM people on Twitter, Telegram, Reddit, or make connections on apps like Bumble Bizz. When approaching potential investors, scammers will try to make their scam sound like the best available marketing opportunity. People who have been investing in NFTs for a while will know how to ignore these messages, however, many of the new-comers are more likely to not recognise these types of scams.

“Among the techniques used by scammers to trick buyers is the one of making copy collections in the attempt of confusing investors into buying the wrong asset. ‘Phishing’ is also quite common: this involves fake portals asking for user login details and credit card information, like, for example, in the Metamask phishing scam. The best way to verify the authenticity of the site you’re on is to use websites like ScamAdviser and Trend Micro Check. In addition, always make sure to check if the contact address of the NFT matches the one that appears on the website where the NFT is listed.

“When looking into investing in NFTs, remember to never send your assets to anyone directly and to use a marketplace instead. In addition, you should use a hardware wallet, not a web-wallet, in order to avoid all risks – if your browser is compromised, a skilled hacker could easily gain access to your assets and take them. When browsing for the top collections on websites like OpenSea, you should look for the blue ‘verified’ check to be sure that the item selected in a true NFT with value. Most importantly, never share your credit card information and always make sure you’re on a legitimate website.”