Brooklyn DA Shuts Down 40 Fraudulent NFT Websites Following Artist Scam
Brooklyn’s District Attorney’s Office has acted against fraudulent non-fungible token (NFT) operations after an 85-year-old artist lost a significant amount of money to a scam. The artist was targeted via LinkedIn and misled into minting his artwork on a counterfeit NFT platform.
The NFT Scam Unfolds: A Deal Too Good to Be True
The artist, eager to showcase his work in the expanding NFT market, was convinced to mint his creations on a fake website mimicking OpenSea. The deceptive appearance of the site led him to trust it.
After being informed of $300,000 in sales, the scammers demanded a $135,000 fee to access the profits. The artist depleted his retirement savings, maxed out credit cards, and secured a loan to pay the fee.
Eventually, he discovered that the supposed profit was fictitious, and the scammers had vanished with his funds, leaving him both emotionally and financially devastated.
Brooklyn District Attorney Eric Gonzalez noted that this incident was part of a broader scheme, revealing a network of 40 fraudulent websites targeting artists similarly.
These websites often replicate popular NFT platforms to appear credible, tricking victims into disclosing sensitive information like crypto wallet seed phrases, thus granting scammers access to their digital assets.
The DA’s Virtual Currency Unit traced the stolen funds to Nigeria, where they were primarily converted into Naira, complicating recovery efforts. Further investigations indicated that these fraudulent sites were also managed from Nigeria.
A Global Warning for Artists
Two additional victims, artists from Georgia and California, were identified as part of the same scam, highlighting its global implications.
In response, the Brooklyn DA’s Office dismantled the fraudulent websites and issued warnings to artists in the NFT space.
“Stick to established marketplaces,” the DA’s Office cautioned, stressing the importance of vigilance against phishing scams and illegitimate platforms. They emphasized that artists should never share their crypto wallet seed phrase.
A similar incident in 2023 prompted the FBI to issue warnings about cybercriminals posing as legitimate NFT developers. These scammers created imitation accounts of reputable creators to deceive investors.
By promoting fake “exclusive” NFT drops, they stole cryptocurrency and valuable digital assets from victims. This situation underscores the necessity for artists to remain cautious when engaging with new platforms, particularly those that seem too advantageous.