Cybercriminals masquerade as legitimate non-fungible token (NFT) developers in financial fraud schemes targeting active users within the NFT community, the US Federal Bureau of Investigation (FBI) has warned.
The fraud scheme involves the crooks either hacking into legitimate NFT developer social media accounts or creating scam accounts to promote new NFT releases.
“Fraudulent posts often aim to create a sense of urgency, using phrases like "limited supply," and refer to the promotion as a "surprise" or previously unannounced mint,” the FBI said.
Those posts contain phishing links leading to a spoofed website posing as a legitimate extension of a particular NFT project. Victims are then invited to connect their crypto wallets and purchase the NFT but, in reality, they connect to a drainer smart contract, which transfers the owner’s digital assets to wallets under criminals’ control.
Stolen assets are often processed through a series of cryptocurrency mixers and exchanges to obfuscate the path and final destination of the stolen NFTs.
The FBI has shared a number of recommendations on how to avoid falling victim to such scams:
If a well-known NFT project announces a surprise NFT opportunity, research if the developer has revealed surprise opportunities in the past or if they have made statements that they will never offer surprise mints.
Many criminal actors prey on the sense of urgency victims feel whenever a surprise opportunity is announced.
Check to ensure the social media account advertising the opportunity is the legitimate account of the development team, and not a cloned account made to look like the real thing. Any discrepancies in spelling, account history, screen name, followers, or creation date indicate the account proclaiming the opportunity is fake.
When accessing websites that request you connect your cryptocurrency wallet, look to see if the website is real and not a clone of the legitimate website. Indicators of this would be a misspelled web domain name, a URL with additional or unnecessary characters, or links on the webpage that either do not work or reroutes users back to the main page.
Vet any opportunity that offers NFTs as a reward especially if it feels too good to be true.