Why Are We (Still) Falling for NFT Giveaway Scams (And How Can We Not)?

Just last month, the NFT sector experienced an all-too-familiar situation; Ethereum founder Vitalik Buterin had his Twitter account hacked and those responsible tweeted out a link which offered a free NFT. Allegedly, this ‘free’ NFT was meant to promote a commemorative drop from Consensys, but in actual fact it was one of many NFT giveaway scams that have flooded the industry.

Vitalik’s millions of followers were told to link their NFT wallets to claim this free ‘prize’ but instead, those who clicked had their assets stolen. In total, over $800,000 worth of NFTs were stolen and this included the iconic CryptoPunk #3983 which was sold shortly after. Eventually, Buterin did get his account back and those affected have been scrambling to find ways of recovering their NFTs, if at all. Sadly, we know from all the previous NFT thefts that this will be an uphill battle.

Some, like Hollywood actor Seth Green, have been able to buy back their stolen assets while others eventually give up. This is just the latest in a very long line of NFT giveaway scams that have robbed consumers of their precious assets. But why does this tactic still work in 2023 and how can we make sure we don’t fall victim?

Why do NFT Giveaway Scams Work?

Usually, we would assume that after dozens (if not 100s) of giveaway scams have been used to rob NFT holders in the past, we would no longer fall for them, but the truth is that these hackers play on human psychology. 

On some level, we all like the appeal of free stuff. Even though they likely have lower success rates these days, the ‘free iPhone giveaway’ scam is still being pushed because at least a few people fall for it. It’s sad but true, and NFT giveaway scams have not been in existence for as long and so, not everyone is aware of how they work. 

It is also very telling that the hackers target reputable people with large followings like Vitalik Buterin. You’re less likely to click on a random giveaway link online but if the founder of Ethereum says it’s legit, you’re more likely to believe.  

How Can We Avoid Them

While ultimately, these scams are designed to be as effective as possible, there are a few ways to potentially avoid becoming a victim. 

1. Verify: When a popular person tweets out a link promising a free giveaway, try and confirm if it is real. One of the core features of these scams is that they say that there is only a limited time to claim the assets which leads to victims rushing to click links without doing research. Still, take a minute to verify. Buterin’s account said that Consensys was involved in the NFT drop, for example. The best thing to do would be to visit both the Consensys Twitter page and website to confirm if this is true. Hackers sometimes gain access to several accounts simultaneously to trick victims but this could still help.
2. Separate Your Assets: The goal of this scam was to get people to link their NFT wallets so the assets within them could be stolen. A way to work around this is to have all your NFT assets in a separate wallet. Ideally, you should have your most valuable NFTs in a cold wallet and have a separate wallet purely for giveaways and whatnot. After all, the hackers can’t steal assets from your wallets that aren’t there. As a rule of thumb, the wallet that you connect to a link online for free NFTs should only already have NFTs that you’re willing to lose. Keep this risk at the forefront of your mind and you are less likely to click.
3. Embrace FOMO: The appeal of these scams is that everyone wants free stuff and doesn’t want to miss out on a giveaway. But to protect your assets, it is best that you become comfortable with missing out on some of these supposed free NFTs. If a person who doesn’t usually host giveaways tweets a link promising a free NFT, refer back to step 1 and verify that this is legit. If you don’t find any evidence to back it up, allow yourself to be comfortable with the idea that you might miss out. It might be hard but it’ll be even harder if you end up losing your precious NFTs.

Final Thoughts

We can’t stop scammers from trying to steal our NFTs but we can take steps to stop them from succeeding. The incident with Vitalik Buterin shows just how much can be lost but also how much we can save by taking some actionable steps to protect ourselves and our assets. 

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*All investment/financial opinions expressed by NFT Plazas are from the personal research and experience of our site moderators and are intended as educational material only. Individuals are required to fully research any product prior to making any kind of investment.