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Serious NFT Security Risks: How to Safeguard Your Digital Assets

The widespread use of non-fungible tokens (NFTs) has created significant digital assets risk to the different blockchain system’s security. In March 2021, the number of dubious domain registrations, including the names of NFT retailers, grew by roughly 300%.

To engage in NFT marketplaces, you must have an operational cryptocurrency wallet. It exposes holders to new NFT vulnerabilities, as attackers can access your crypto wallet via your marketplace account.

As we will see, malicious actors have joined NFT platforms and OpenSea’s Discord server, impersonating support personnel to deceive targets into providing account information. 

Some employ antiquated phishing methods to trick the NFT ecosystem into transferring payments or providing credentials.

The Chief Executive Officer of Digital Asset Research, Doug Schwenk, asserts that NFTs are susceptible to various vulnerabilities and a security risk that may be unfamiliar to most businesses. “It necessitates a variety of new operating procedures, creates access to a new set of systems (public blockchains), & implies hazards with which many businesses are less accustomed.”

The NFT Growth and Safety

NFT smart contracts

The non-fungible tokens sector was worth at least $40 billion in 2021. In January 2022, OpenSea, the world’s largest NFT marketplace, sold 2.3 million NFTs. It was a million-sale increase compared to December 2020.

In January, the sales by value also broke records, with $4.7 billion sold on OpenSea alone. Even classic auction houses such as Christie’s and Sotheby’s now host token auctions. With so much financial activity occurring, it was inevitable that dangerous actors would take note.

Fake Support for NFT on Discord

Scam NFT projects

Consider the social engineering deception that occurred on the OpenSea Discord server. Attackers waited for someone to ask a support inquiry on the instant messaging application. They then invite the victim to a second bogus support’ server.

After attracting the victim to their server, the attacker requests screen sharing to resolve the issue. The victim is then asked to “resynchronize” their MetaMask Chrome extension wallet with their MetaMask app. Next, the user is directed to execute the Configuration> Advanced> Sync with Mobile action chain, which generates private keys.

Attackers can then capture a screenshot of the QR code and use it to synchronize the wallet with their MetaMask application. Following synchronization, the attackers are free to steal cryptocurrency from the victim’s wallet.

Antiquated Phishing and NFT Scams

NFT Wallets hacked

In February 2022, fraudsters stole hundreds of NFTs from OpenSea users, stealing 254 tokens. The estimated worth of the theft was $1.7 million, and it occurred for around three hours.

OpenSea CEO Devin Finzer stated that victims trick into signing an online blank smart contract to transfer tokens. After obtaining the authorization signature, the perpetrators filled in the contract details without the victim’s knowledge.

It allowed the attackers to breach cyber security to get digital asset ownership. This attack resulted from phishing, a fraudulent email requesting a smart contract signature.

Imposter NFT store websites use email & social media phishing efforts to entice targets into divulging their credentials.

3 Most Significant NFT Security Risks

  1. Phoney Trading Platform
  2. Bogus Technical Help
  3. Fake Projects

Phoney Trading Platform

To invest in Non-Fungible Token, you must first determine where you can buy and sell NFTs. When conducting an online search, it is possible to find many fraudulent NFT trading websites.

These fraudulent websites resemble legitimate sites, so it becomes difficult to distinguish between them.

Bogus Technical Help

Fake customer service or technical help is one of the most prevalent security concerns.

Fake Projects

Scammers may attempt to get you to invest in some non-fungible tokens projects. They may give you links to counterfeit NFT platforms.

Ways to Improve NFT Security Risks

The following methods can improve NFT security:

Avoiding NFT scams
  • Install two-factor authentication on all accounts.
  • Learn how to identify phishing attacks, and never click on or download anything from unknown or suspicious emails.
  • Be wary of requests for new artwork. If possible, investigate the requester’s background and social media presence, and get references.
  • Instead of a software wallet, use a hardware wallet.
  • Protect your work by using DMCA copyright infringement.

The digital assets universe is still in its early stages, and both opportunity and risk are expanding. It is helpful for those who invest in the NFT space to stay vigilant on security threats.

Conclusion 

It is necessary to perform exhaustive research before diving headfirst into anything because of its buzz. It is advisable when it comes to non-fungible tokens. 

First, you must understand all associated security issues and malicious code. Because of this, buying and selling non-traditional securities on the market will be much more straightforward and risk-free for you.

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