Banksy and other scams in the NFT sector

An NFT collector and trader known as Pranksy was tricked into buying fake digital artwork by the famous street artist Banksy.

Banksy NFT scam

The collector was deceived by a sophisticated fraud created by a hacker who managed to place a link directly to Banksy’s official website and promote the NFT auction on the well-known OpenSea market depicting a pixelized avatar with factories behind it, allegedly symbolizing the environmental damage caused by mining.

Because Pranksy believed it was an original work and was a big fan of the artist, he overpaid competing bidders by 90%, paying almost 100 ETH.

His bid was accepted immediately, but the auction ended a few days earlier than expected and the link to the official website was removed; he realized that he had become a victim of fraud. Confirmation came when Banksy’s collaborator explicitly stated that the artist had never created any NFTs.

Hours later, the perpetrators returned the money, according to Pranksy, the refund was made because he discovered a possible hacker and began following him on Twitter. The winner in this case was OpenSea, the NFT marketplace, which earned a 2.5% transaction fee from the sale of a fake work.

Scams in the NFT sector

On OpenSea and Rarible, the two main platforms where people can buy NFT, it is not necessary to verify that you own something before placing it on the blockchain. Even verifying oneself on these platforms is not difficult. For example, OpenSea does not have authentication at all.

In some cases, cybercriminals posing as real artists on NFT platforms offered works for sale without the authors’ knowledge, which happened to Derek Laufman. The illustrator and comic book creator found that a verified profile was illegally created on the Rarible platform.

Another artist, Milos Rajkovic of Serbia, couldn’t believe it when he found a con man trying to sell 122 of his works as NFT for $ 50,000.

The Hermitage Museum in St. Petersburg is also awaiting a response to its complaint about the illegal sale of tokenized images by Rammstein Group frontman Till Lindemann and the NFT Frame Art platform. In May, the musician was granted permission to record a music video in one of the museum’s rooms, so Lindemann collected several photographs taken inside and then issued without permission of the Hermitage as NFT.

According to experts, buyers can be sure of the value of the NFT only if they are inseparable from physical works of art. Blockchain technology guarantees the authenticity of transactions and preserves data by denying the possibility of modifying them, but cannot verify the authenticity of the data entered, and therefore cannot block the entry of false data or, as in these cases, counterfeit NFTs.

Thanks to NFT and DeFi, transaction fees in Ethereum network have risen to unprecedented levels