Last year, the hype surrounding non-fungible tokens (NFTs) became even more palpable. However, as more people embrace NFTs and become exposed to this new revenue stream, we will likely see fraudsters trying to abuse the system. For those not in the know, NFTs are non-interchangeable units of data stored on a blockchain to certify ownership of a particular digital asset. These assets could be just about anything, from Jack Dorsey’s first-ever tweet to whimsical postcards depicting marijuana-smoking simians. The Common World of NFT Scams NFTs are big business. In 2021 alone, more than $22 billion was spent on those nifty jpegs, and the market looks set for even greater prosperity in the coming years. However, in the same year, crypto and NFT investors lost nearly $14 billion worth of digital assets to crypto scammers. Crypto scams come in various guises. They could come in the form of rug pulls, where purported developers promise to deliver NFTs to prospective clients but later make off with the funds collected for the project without fulfilling their promises. Scams could also come in the form of phishing emails purportedly announcing new NFT airdrops. They could also come in the form of “wash trading,” better known as pump and dump, where a series of trades are used to artificially inflate the value of an NFT and make it seem like the increase in value is the result of organic interest. Chainalysis reports that at least 110 NF...
