According to DLNews, Brooklyn District Attorney Eric Gonzalez has announced the closure of 40 fraudulent NFT marketplace domains as part of an effort to combat a scam targeting artists across the United States. This operation was initiated following an incident involving an 85-year-old Brooklyn painter who was defrauded of $135,000 by scammers posing as art dealers. The victim was approached on LinkedIn by individuals claiming to represent 'OpenSea/Private Mint,' a counterfeit platform designed to mimic the legitimate NFT marketplace OpenSea.
The scammers convinced the artist to mint his artwork as NFTs and pay fees to access over $300,000 in fabricated Bitcoin earnings. Believing he would earn a substantial profit, the artist liquidated his IRA, maxed out his credit cards, and took out a loan to pay the scammers. DA Gonzalez stated, 'These were the tactics used in this case, leading our investigators to a network of fraudulent websites that specifically scammed artists.' He expressed hope that by shutting down these domains and raising awareness about the scheme, others would be prevented from falling victim to similar scams.
While the seizure of 40 domains marks a significant achievement, it is not a permanent solution. Scammers can easily replicate the scheme by using identical templates and slightly altering domain names to continue their operations. Numerous other cases have been reported where artists have fallen prey to similar scams, with fraudsters exploiting social media platforms like Instagram and Twitter. They often approach artists with offers of exorbitant payments in cryptocurrency to create NFTs, only to charge fraudulent 'minting fees' through fake platforms.
This crackdown occurs as NFTs are experiencing a resurgence in popularity and cryptocurrency prices are reaching record highs. The operation underscores the ongoing challenges in combating digital fraud and the need for increased vigilance among artists and other potential victims.