NFT Scam in India: 71-Year-Old Digital Artist Loses Money to Bogus Platform Fees

In a distressing incident that underscores the vulnerabilities in the burgeoning NFT market, a 71-year-old digital artist in India lost INR 1.58 lakhs (approximately $1,895) to scammers posing as NFT art dealers. The artist, referred to as Shivaprasad R. for privacy reasons, was lured by promises of lucrative sales on a fraudulent platform, only to be deceived by bogus fees and unfulfilled transactions.

The Setup: A Fraudulent Opportunity

Shivaprasad, a practicing chartered accountant and professional artist, had his work featured in several local exhibitions and online platforms like Instagram and Facebook. In October 2023, scammers contacted him, masquerading as representatives of a fake NFT platform, nfttradeplace.com. They expressed interest in purchasing his digital art for a substantial sum of 42 ETH (approximately INR 1.09 crore).

Encouraged by the potential earnings, Shivaprasad listed his artworks on the platform. Initially, he was asked to pay a “gas fee” of 0.115 ETH to facilitate the sale. Following this, he was asked to pay additional “delay fees” when he tried to withdraw his earnings, which were never disclosed upfront nor listed on the website.

The Scam Unfolds: Deceptive Fees and Empty Promises

After making several payments totaling INR 1.58 lakhs to cover these purported fees, Shivaprasad realized he had been scammed when no funds were transferred to his account. Despite his repeated attempts to resolve the issue, the platform continued to demand more money. On April 17, 2024, he contacted the cyber police and filed charges under sections 66C and 66D of the Information Technology Act and section 420 of the Indian Penal Code, which cover identity theft, cheating, and dishonestly inducing delivery of property.

The Broader Context: Rising Crypto Scams in India

This incident is part of a broader trend of increasing cryptocurrency scams in India. Despite regulatory crackdowns and efforts by local authorities, these fraudulent activities have continued to rise. For instance, the Enforcement Directorate (ED) recently launched an investigation into an $800 million Ponzi scheme involving a Bollywood celebrity. Such scams highlight the urgent need for better security measures and public awareness to protect individuals from financial fraud in the digital asset space.

Lessons Learned: The Need for Vigilance and Education

The case of Shivaprasad serves as a stark reminder of the risks associated with the rapidly growing NFT market. Artists and investors alike must exercise caution and conduct thorough due diligence before engaging with new platforms. Educating oneself about the mechanics of NFTs and blockchain technology, verifying the legitimacy of platforms, and seeking advice from trusted sources are critical steps to avoid falling victim to such scams.

Conclusion: Moving Forward with Caution

As the NFT and broader cryptocurrency markets continue to evolve, the importance of vigilance cannot be overstated. Shivaprasad’s experience, while unfortunate, provides valuable lessons for others in the digital art community. By fostering greater awareness and implementing stricter security protocols, the art and crypto communities can work together to create a safer and more trustworthy environment for all participants.

This incident underscores the necessity for continuous education and the development of robust security measures in the digital space. It serves as a call to action for both regulators and market participants to prioritize safety and transparency, ensuring that the promise of blockchain technology can be realized without compromising the security of its users.