Counterfeits, Fakes, and Other NFT Scams

Imagine a scenario where someone is new to the world of non-fungible tokens (NFTs) and excited to make purchases and add these tokens to her digital wallet. She logs onto an NFT marketplace and starts making bids until she finally wins her first auction. She’s exhilarated, but there’s a problem: the NFT she’s purchased wasn’t the seller’s property to peddle. A nightmare scenario for both buyer and the true artist behind the work she’s purchased, and these NFT scams are becoming increasingly common.  

 

The tenuous relationship between artists, their art, their intellectual property, and NFTs has been well documented—we wrote about the tensions in the early days of NFTs' surge into the public consciousness. But as NFTs have become more popular and more globally recognized, brands have started using them as a revenue stream, and pirates have set sail on an open sea. 

 

How Can The Department of Defense Use Blockchain for Part Tracking? 

 

Counterfeit NFTs Set Sail 

Which brings us neatly along to OpenSea. A free NFT minting platform, OpenSea is one of the largest and most popular online marketplaces, but the company recently recognized that their platform was being overwhelmingly misused. In a January 2022 tweet, OpenSea stated “Over 80% of the items created with this tool were plagiarized works, fake collections, and spam.” To combat this, the platform said they would strictly limit the number of free NFTs users could mint to 250. This was met with dismay and derision from OpenSea’s users, which led the company to backtrack on the decision. 

 

It’s unfortunate, though, that OpenSea may only be a symptom of a wider problem. Cent is the NFT platform most famous for auctioning an NFT of former Twitter CEO Jack Dorsey’s first tweet for $2.9 million. One week after OpenSea’s announcement, Cent CEO Cameron Hejazi announced his platform would stop all NFT transactions, describing the issue of counterfeit NFTs as a “fundamental problem” to Reuters. Hejazi told Cointelegraph “Protecting creators from those who might steal or abuse their work—and protecting buyers from potential fraud—is very important.” 

 

Preventing NFT Scams 

So, what can be done to address these problems? One artist, Adrian Chesterman, who has worked with several other high-profile artists, laid out a three-step guide to those bidding for NFT like our friend from the beginning. He presented these steps to Creative Bloq which are summarized below: 

 

  1. Consider whether the price is too good to be true 
  2. Verify authenticity; reverse Google Image search is a viable tool 
  3. Choose the right platform. In his view, human moderation is best 

 

Now, these are great steps that all prospective NFTs should consider before making a purchase, but how can artists and organizations keep their intellectual property safe from bad actors? Aja Trier’s Van Gogh-inspired art was turned into nearly 86,000 NFTs and sold on OpenSea without the artist’s permission weeks before the company’s initial decision to limit the number of free NFTs that could be minted. Unfortunately for Trier and many others like her, the only thing she could do beyond appealing to OpenSea to take down the stolen art (appeals that are often rejected) is to release a public statement specifying which platforms she sells NFTs on if any. 

 

From our perspective, that isn’t good enough. NFT marketplaces need to do a better job of protecting the rightful owners of intellectual property. SIMBA’s NFT marketplace lets you and your brand control and customize your community’s NFT experience. Pair that up with our Media Verify tool, and SIMBA provides the robust security your intellectual property needs so stay safe from bad actors and cybercriminals. 

 

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