Scammers are now using non–fungible tokens (NFT) to spread viruses and steal money from crypto wallets or launch shadow mining. What other complaints do NFT users have?
NFT and art
NFTs were originally coined to allow creative people to monetize their art. NFTs became hugely popular in 2021 after an NFT painting by Beeple was sold at a Christie’s auction for $69.3 million.
Musicians, athletes and other celebrities started releasing their own NFTs, the NFT market growing 400 times to exceed $13 bio in just one year. However, despite the excitement around NFTs, users have all sorts of complaints about the tokens.
What is wrong with NFT?
Just like the cryptocurrency market in general, NFT is not regulated in most countries, their use creating a great number of legal issues.
The unregulated issues include copyright, form of ownership and taxation. For example, Christie’s rules state that an NFT buyer only owns the token but not the artwork.
In some countries, financial regulators consider NFTs non-registered securities, which makes their use illegal. Environmentalists are also not happy with NFTs, claiming that the carbon emissions they create are comparable to that of an entire country.
There are also vulnerability issues. CheckPoint, a company dealing with IT security, earlier found a vulnerability in the OpenSea NFT marketplace which potentially allowed hackers to access users’ crypto wallets and steal money.
New malicious tactics
According to Eset Threat Intelligence, NFTs have largely replaced torrents and adult websites when it comes to spreading malware. Scammers using this scheme embed a virus into an NFT to steal money from crypto wallets. Gaming NFTs that provide superpowers or weapons are targeted most frequently. Moreover, NFTs are now used for shadow mining, i.e. when computers start mining cryptocurrency without their owners’ knowledge. Every medal has two sides. Despite their undoubtful advantages, NFTs still have serious flaws that buyers should not forget about.
By Dmitry Noskov, expert at StormGain cryptocurrency trading platform