According to Cointelegraph, the Brooklyn District Attorney's Office has successfully shut down 40 fraudulent non-fungible token (NFT) marketplace websites following a scam that defrauded an 85-year-old artist of $135,000. The artist was deceived by an individual posing as an art dealer on LinkedIn, who persuaded him to mint his artwork on a counterfeit NFT marketplace designed to mimic the New York-based OpenSea platform.
The scammer falsely informed the artist that he had earned $300,000 in profits. However, to access these supposed earnings, the artist was required to pay a $135,000 fee. To meet this demand, he liquidated his retirement account, used credit card payments, and took out a loan. It was only after these actions that he realized the promised $300,000 was a fabrication, leaving him both emotionally and financially devastated.
District Attorney Eric Gonzalez highlighted that the tactics used in this case led investigators to uncover a network of fraudulent websites targeting artists. He expressed hope that shutting down these domains and raising awareness would prevent further victims. The office also reported that two other artists from Georgia and California fell prey to the same NFT scam.
The District Attorney’s Virtual Currency Unit traced the stolen funds to accounts at a Nigerian exchange, where they were primarily converted into Nigerian currency, making recovery efforts challenging. The investigation revealed that the fake OpenSea website appeared to be controlled and funded from Nigeria. Some of the fraudulent websites even prompted visitors to enter their crypto wallet seed phrases, potentially allowing scammers to drain the contents of users' online wallets.
The Brooklyn District Attorney’s Office stressed the importance of using only reputable NFT marketplaces for selling artwork and remaining vigilant against phishing attempts via email or websites that mimic well-known NFT platforms. Artists were also advised never to disclose their crypto wallet seed phrases. The office cautioned, "If it seems too good to be true, it likely is," urging individuals to conduct thorough research and seek advice from fellow artists.
