The Brooklyn District Attorney’s Office has taken a significant step in combating online fraud by shutting down 40 fraudulent NFT marketplaces, following a distressing case involving an 85-year-old artist. This investigation uncovers the operations of a deceptive network that lured unsuspecting artists into losing large sums of money, with one victim suffering a loss of $135,000.
In a detailed account, the victim reported being contacted through LinkedIn by a scammer posing as a legitimate art dealer. The scammer convinced him to mint his artwork on a fake NFT marketplace that closely resembled the well-known OpenSea. This unfortunate artist was promised a return of $300,000 but was manipulated into paying a ‘release fee’ to access his supposed profits.
The DA’s Virtual Currency Unit stressed how the intricate tactics used by scammers led to a broader discovery of fraudulent websites. Eric Gonzalez, the District Attorney, expressed hope that this action would raise awareness and help prevent further victimization among artists. He stated, “It is my hope that by shutting these domains and raising awareness about this scheme, we will prevent others from falling victim to this scam.”
The investigation revealed that the funds were traced to various accounts in Nigeria, where they were cashed out primarily in local currency—making recovery increasingly complex. It was noted that many victims had even unknowingly input their crypto wallet seed phrases into these fraudulent sites, further compromising their digital assets.
Important Reminders for Artists:
To safeguard against such scams, artists are advised to:
- Only use established and reputable NFT marketplaces.
- Remain vigilant against phishing attempts via email or suspicious websites.
- Never reveal their crypto wallet seed phrase.
Additionally, the message is clear: if an offer seems too good to be true, it likely is. Artists are encouraged to do their due diligence and consult with peers before making any financial commitments regarding NFT transactions.
