Brooklyn DA Closes 40 Scam NFT Websites After Deceiving 85-Year-Old Artist

NFT Fraud Scheme: Brooklyn District Attorney Shuts Down 40 Scam Websites

In a significant crackdown on fraudulent activities within the non-fungible token (NFT) space, the Brooklyn District Attorney's Office has successfully shut down 40 deceptive NFT marketplace websites. This action comes on the heels of a particularly distressing scam that victimized an 85-year-old artist, defrauding him of $135,000.

How the Scam Worked

The victim was lured by a scammer who posed as an art dealer on LinkedIn. This impersonator convinced the artist to mint his artwork on a fake NFT marketplace that was designed to closely resemble the legitimate New York-based OpenSea platform. Unbeknownst to the artist, he was stepping into a carefully laid trap.

The scam escalated when the fraudster falsely informed the artist that he had generated $300,000 in profits from his NFTs. However, to access these supposed earnings, he was required to pay a hefty fee of $135,000. In a bid to fulfill this requirement, the artist liquidated his retirement account, made payments using credit cards, and even took out a loan, leading to financial and emotional devastation when he later discovered the truth.

Investigative Findings

District Attorney Eric Gonzalez noted that the deceptive tactics employed in this case shed light on a broader network of fraudulent websites targeting unsuspecting artists. The District Attorney's Virtual Currency Unit took a proactive stance in tracing the stolen funds, which led them to accounts at a Nigerian exchange. Most of the funds were converted into Nigerian currency, complicating the recovery process.

Furthermore, the investigation revealed that the phony OpenSea website was likely controlled and funded from Nigeria. Disturbingly, some of these fraudulent platforms prompted visitors to enter their crypto wallet seed phrases, thus potential draining the contents of users' online wallets.

Advice for Artists

In light of these events, the Brooklyn District Attorney’s Office issued crucial guidance aimed at safeguarding artists from falling victim to similar scams:

• Use Reputable NFT Marketplaces: Only engage with well-known and verified platforms when selling artwork.
• Stay Vigilant: Be wary of phishing attempts through emails or websites that imitate reputable NFT platforms.
• Protect Your Wallet: Never disclose your crypto wallet seed phrases to anyone.
• Conduct Thorough Research: If an opportunity appears too good to be true, it likely is. Always perform due diligence before making financial decisions.

Conclusion

The Brooklyn District Attorney’s Office hopes that by shutting down these fraudulent domains and raising awareness, they can prevent further victims from experiencing similar scams. The distressing stories of the artist from Brooklyn, as well as two others from Georgia and California who also fell prey, underscore the need for vigilance in the emerging NFT landscape.

As the digital art and NFT realms continue to evolve, artists must equip themselves with knowledge and skepticism to navigate these spaces safely. Stay informed and always trust your instincts when a pitch seems too favorable.