Brooklyn District Attorney Eric Gonzalez reported that it had shut down 40 fraudulent NFT marketplace domains as part of a crackdown on a scam that targeted artists across the US.
The operation began after an 85-year-old Brooklyn painter lost $135,000 to scammers posing as art dealers.
The victim was contacted on LinkedIn by someone claiming to represent “OpenSea/Private Mint,” a fake platform mimicking the legitimate NFT marketplace OpenSea.
The scammers persuaded him to mint his artwork as NFTs and pay fees to access over $300,000 in falsified Bitcoin earnings.
The artist, believing he would make a significant profit, liquidated his IRA, maxed out credit cards, and took out a loan to pay the scammers.
“These were the tactics used in this case, leading our investigators to a network of fraudulent websites that specifically scammed artists,” said DA Gonzalez. “It is my hope that by shutting these domains and raising awareness about this scheme, we will prevent others from falling victim to this scam.”
NFT scam resurgence
While the seizure of 40 domains is a significant victory, it’s far from a permanent solution.
Scammers can quickly replicate the scheme, using identical templates and slightly altering domain names to resume operations.
There have been many other cases of artists falling for similar scams, where fraudsters exploit social media platforms like Instagram and Twitter.
They often approach artists with offers of absurdly high payments in cryptocurrency to create NFTs, only to charge fraudulent “minting fees” through fake platforms.
This crackdown comes as NFTs are regaining popularity and cryptocurrency prices are surging to record highs.
Kyle Baird is DL News’ Weekend Editor. Got a tip? Email at kbaird@dlnews.com.
