Fake NFTs: How to manoeuvre, buy and protect yourself when buying art pieces

Technology is helping to make art profitable again, but fraudulent imitations and plagiarism is becoming are a major issue

Purva Grover

Published: Fri 15 Apr 2022, 10:37 PM

Last updated: Fri 17 Jun 2022, 6:50 PM

NFTs (non-fungible tokens) are the future of art, undoubtedly. It's a technology invented several years ago, that makes unique use of the Ethereum blockchain to record the ownership of an asset. That asset can be a real-world asset such as an antique car or a piece of original art. It can equally be a virtual asset — something that is digital and which exists only online, such as digital art.

To date, 99% of NFTs have been used to document the ownership of digital art. The existence of this technology, and its use in the art world, has caused an explosion in the growth of the digital art industry.

In addition, it’s good for an artist’s profitability. They can prove if their works are counterfeited, and they can include criteria to get royalties every time their works are re-sold in the future. Over the last year, the NFTs market has exploded, with a digital-only piece of art selling for $69 million in 2021.

The technology is helping to make art profitable again, but plagiarism and fakes are “becoming a massive issue” for both artists and buyers experts agree. “One of the latest examples is of Takashi Murakami, one of the most acclaimed Asian artists renowned for his flower series created in a “superflat” aesthetic.

Recently, he published a post about “receiving reports of troubles with deceptive scam sales sites and fraudulent announcements” for Murakami.Flowers, and complained about being crushed by the stress on this occasion,” says Daria Prodaevich, Art Director, Theatre of Digital Art (UAE’s hub for digital art), Dubai.

Why is the counterfeit NFT problem is only getting worse?

British artist Adrian Chesterman, who has worked with the likes of Steven Spielberg and Chris Rea, has now crossed over into the digital space, says, “Since the explosion of NFTs last year, plagiarism and fakes have been an increasing problem. This is attributable to two main reasons. First, demand is soaring globally for NFTs and therefore there are simply a lot more people in the market – both collectors and artists. Second, some of the major NFT platforms are not fit for purpose because users can list NFTs without adding them on the blockchain and they don’t pay fees until they sell. The vetting systems need to be more robust.”

How can buyers and collectors (new and existing) spot the fakes as demand soars?

“It is down to due diligence. Whether buying for the love of the piece itself or even if treating it as an investment, doing detailed research into the person, company, artist, platform, and idea/concept behind it are paramount steps,” advises Jonas Lund, a Swedish conceptual artist, whose NFTs can be witnessed at Galloire, a Dubai-based contemporary art gallery.

If you are doing that and also ensuring you are purchasing from the right sources (use verified official links, do not respond to direct message links etc.), then, for the most part, you are protecting yourself.

Edward Gallagher, founder and CEO, Galloire, keeps it simple when he says, “If in doubt, ask, don’t click and sign with your wallet without being 100 per cent sure. The NFT community is very positive and welcoming, so ask for help on Discord or find someone like us to help you initially navigate NFTs.”

Daria agrees with the community support and advises to find a friend who knows how the NFT marketplaces work and consult with them, when necessary, followed by, “Check the official social media accounts of the artist/art project, the size of their audience on Twitter and how live the communication is on their Discord.” If this is a famous artist, you should check whether their art project has already been mentioned in the centralised social networks by some well-known accounts.

A checklist to keep in mind before you hit ‘buy’

If you’re looking to be more self-sufficient then follow a few critical rules, Edward advises, “Don’t click any links direct messaged to you (in Discord or anywhere) to go to a mint site or indeed anywhere; they are likely to be fake. Only use the link under Official Links in Discord or under a project’s verified Twitter account.” Ideally, the project will be officially verified on Opensea (or the like), but often new projects are not. If you are buying off the secondary market, look to see if the total amount of items is correct (say it is a 10,000 collection, there should be 10,000 items minted). But best to find any project only from their official link in Discord.

Chesterman says there are ways collectors can buy NFTs – “the future of art” – without being caught out by scammers, “First off, the rule of thumb is: If the deal seems too good to be true, that's because it probably is. Prices of NFTs are based on supply and demand. If an NFT is priced significantly cheaper or more expensive than similar NFTs from the same collection or category, it may be a fake. Check the authenticity of the NFT by doing a reverse Google image search. In addition, the platform can verify collections and their artists. Typically, a blue checkmark will appear by its title if it’s the real deal.”

Ultimately, the best way to ensure your NFT is genuine is to choose the right platform, perhaps one with human moderators is best. Daria sums up the discussion by quoting the art collector Sylvain Levy: Collecting art can make an ordinary person have an extraordinary life, “But don’t hurry to act on the emerging NFT market — read, compare and verify all the information that you get before purchasing a piece of art.”

23 per cent of people in UAE own NFTs

The percentage of people who own a non-fungible token (NFT) in the UAE is more than double the global average, according to a survey of 28,000 people conducted by finder.com. According to the survey, which polled 1,004 people in the country, 23 per cent of people in the UAE own at least one NFT. The average rate of NFT ownership around the world was found to be 11.7 per cent. The UAE ranked fourth highest on the list, behind the Philippines (32 per cent), Thailand (27 per cent), and Malaysia (24 per cent).

purva@khaleejtimes.com