Cybersquatting is becoming a threat to any company. The number of reported cases as a result of business involving NFT technology is growing rapidly.

And this is not surprising, as cybersquatting sites are effective launch pads for much more serious attacks.

The term cybersquatting refers to the unauthorized registration and use of Internet domain names that are identical (URL) or similar to trademarks, service marks, company or personal names.

Criminals who adopt the cybersquatting strategy obtain and use the domain name in bad faith and with the clear intention of profiting from the actual trademark owner. This action involves registering web domains that appear trustworthy to visitors, but are actually fake addresses designed to lure victims.

Cybersquatting has serious consequences for business

Cybersquatters have the potential to harm your business. The reason is simple: your customers remember and associate your brand with the things they see or hear about your company.

If consumers visit what they assume is your site and see unrelated, possibly obscene content, they may realize it is not from your company, but may be deterred from searching for the actual URL of your site.

Not to mention the effect of very similar domain names that your customers can access by incorrectly typing in your company name. This can not only tarnish the reputation of the brand owner, but also put your employees and customers at risk of data and identity theft, generating millions in losses.

NFT platforms and tokens are being affected by cybersquatting

NFTs are unique tokens based on blockchain technology and used as digital assets.

Unlike cryptocurrency tokens like Bitcoin, which are fungible, NFTs are digitally unique, no two NFTs are alike. NFTs can be based on three-dimensional items or artwork, or they can be purely digital creations, for example, a collectible digital sneaker or a token used in a video game.

Most NFTs are protected by Copyright Law as creative works and may be derivative works based on pre-existing copyrighted works. NFTs may also incorporate or use trademarks.

Because of innovation and resonance in the online marketplace, cybercriminals are inserting "nft" into domains, subdomains, URLs, email addresses, and other attack vectors to appear more trustworthy.

In addition, criminals are also using other NFT-related text strings such as "mint" and popular NFT platforms and tokens like OpenSea, MetaMask, Axie, and Nifty, to name a few. Famous names have been used in over 34,000 domains according to the NFT-Related Domains study done in January 2022.

Some of these domains host NFT giveaways, limited-time offers and other attractive content, however, certain addresses are being flagged as malicious by various malware engines.

In fact, cybersquatting is being used to victimize consumers who want to buy branded NFTs. On the other hand, the owners are also engaging in huge court battles to take these domains away from specialized cybersquatting gangs.

How to fight Cybersquatting

With due diligence and the help of proactive domain research and monitoring tools, companies can identify potentially malicious domains before they can cause damage to their business.

For example, IT professionals can monitor companies' brands regularly to identify misspelled variations recorded for use in phishing and spam attacks.

These tools can also help organizations prove brand misuse if they are in the middle of trademark or copyright infringement litigation.

After identifying potential cyber invaders, they can file trademark and trade dress infringement cases against them.

Once the legal dispute is won, companies can take the necessary steps to either perform the removal of the offending URLs or take ownership of them so that they cannot be used for more sinister activities.

Another good practice is to identify variations of your misspelled domain as soon as you register it. This approach can avoid the hassle of dealing with cyber attackers when they have already been used in attacks.

While this may cost you some money, the amount you will spend on registering copied domains is certainly no greater than a data breach, should you become a victim. The average cost of a data breach today is $4.24 million, almost 10% higher than it was before the pandemic, according to a recent IBM Security survey. 

So companies of any size can watch over the integrity of their brands and domains with the help of domain research and monitoring tools.