As the famous saying goes, “Better safe than sorry.” This couldn’t more true in the Crypto/NFT space. In a previous blog article, How to keep your crypto safe, we discussed different ways on how you can safeguard your digital assets.
In this lesson, we’ll be going over the most common methods that a scammer might use to drain wallets and some tips on how to look out for these telltale signs.
Phishing scams
Email scams
One of the most popular NFT marketplaces is OpenSea, and you’ll be spending a lot of time here conducting your trades. As an OpenSyou may of emails from OpenSea regarding offers made on your items, your purchases, and sales.
However, it is possible that you’ll receive an email that seems harmless, but could be a threat to your security. Recently, the platform has come under fire for the mishandling of its customer email addresses.
In July 2022, OpenSea learned about an employee of their email vendor, Customer.io, who misused their employee access to download and shared the email addresses of OpenSeThese emails will likelyrized third party.
It’s very likely that these emails will become targets for phishing, so it’s best to be on high alert for anything suspicious from OpenSea. If you receive an email from them, it might be safer to manually search for the link rather than just clicking on the prompt in the email.
For example, just like in the photo below, never download anything from these links, always check and verify the legitimacy of the attached URLs, never share your passwords or secret recovery phrases, and never sign any wallet transactions that are prompted from these as well.
Hacked Twitter scams
When you’re more invested in the space, you’ll often find “stealth mints” being shilled on Twitter and Discord, but what does that entail?
Stealth mints is a method used to launch projects under-the-radar, as a means of avoiding any gas wars, which can make minting NFTs really expensive.
However, not all stealth mints are actually what they seem to be, even if they’re shared on Twitter by a verified project or influencer.
In these situations, it is better to take a pause and think it through. Ask around for the opinions of others in various Discord communities, check out the Twitter sentiment and at the same time, see if anyone called it a scam yet.
With Twitter accounts getting compromised, it is hard to tell between the real and fake accounts.
A couple of ways to tell the difference is to do a history check on the contents that the account has tweeted. Some important questions to ask yourself will include:
- Does the content of the tweet tie in well with the project’s theme or brand?
- Were there any important announcements that were made but were not found on that account?
- Cross-check with the official discord server to verify the legitimacy of the Twitter account.
- If the account is posting about giveaways or free mints, if it sounds too good to be true, it probably is.
Misleading links
One or two letters can make all the difference and many have reportedly been drained of their assets just because they clicked on opensea.is instead of opensea.io, or because they clicked on a site titled: Magic Eden or X2Y2 that is promoted on a Google ad, when in fact it wasn’t the official site.
Scammers often catch those who don’t pay that much attention to what they’re clicking, so it’s best to always double-check the spelling of the links that you put into your search bar. To verify their authenticity, it would be best to go to their verified or official Twitter or Facebook page and check out their official links instead of searching them on the internet.
Airdrop Scam
If you have an Ethereum wallet, chances are you might find some random digital assets being deposited into your wallet without your knowledge.
While some are legitimate airdrops from projects that you have in your collection, others tend to include malicious links or scam websites that act as wallet drainers. Any interactions with these mysterious assets could lead to catastrophic losses.
To keep safe against these, inquire about the legitimacy of the digital assets that’s airdropped to you.
To verify if a project did an airdrop, you can simply look it up in their official announcements channel or ask other community members for their opinions too!
On the other hand, if you’re dealing with a random NFT, the safest thing to do would be nothing at all. Avoid any sort of risk by simply leaving the asset in your wallet and never interacting with it.
Rug Pulls
One of the most common ways for a project to get users to part with their money is a rug pull scam.
In the lifetime of a project, the team will put out roadmaps detailing their tokenomics, marketing plans, and the future of the digital asset. With the promise of new innovation, game-changing ideas, and the likes of it, which can potentially be a ruse to attract potential collectors and investors.
There are great projects out there that are realizing each milestone of their roadmap, updating holders and their communities on the next steps ahead, there are times wherein a project’s founders are nowhere to be found after several weeks, and in some cases, even a few days after the project launches and sells out their tokens or NFTs.
This is a classic example of a Rug Pull, where the founders or team disappears with the funds raised through the sale of digital assets and disappears without a trace.
One of the toughest challenges in the crypto space is determining whether a project is legitimate or a potential Rug Pull, but there are some indicators that can help you make a more informed decision.
- Check if a project had any suspicious-looking activity on its Social Media Channels like Twitter and Discord server. If these look heavily botted (meaning they have fake followers, members, or engagement), then that could be a sign that the project is only trying to drive up hype to ensure they mint out or sell out their digital assets, which will allow them to leave with even more cash if they decide to exit.
- You could also check the backgrounds of the teams, which is termed Doxxing. If they chose to remain anonymous, then there is a slight likelihood that it ends up being a Rug Pull, since it becomes harder to track them down once they disappear. However, it is still important to remember that many Rug Pulls can be quite good at deceiving by having all the positive indicators leaving you non-the-wiser. Therefore, only invest what you can afford to lose.
Scammers and bad players will continuously evolve as the cryptocurrency becomes more popular and starts to mature. One thing is for sure is to always keep an eye out for these tell-tale signs of potential scams to keep yourself out of harm’s way.
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