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

And that's not surprising, because cybersquatting sites are effective launching 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 names or persons.

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

Cybersquatting has serious consequences for business

Cybersquatters have the potential to damage 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 that it's not from your company, but they may be prevented from looking for your site's actual URL.

Not to mention the effect of very similar domain names that your customers can access by mistyping 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 such as Bitcoin, which are fungible, NFTs are digitally unique - no two NFTs are the same. NFTs can be based on items or three-dimensional works of art, 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 the Copyright Act as creative works and can be derivative works based on pre-existing copyrighted works. NFTs can also incorporate or use trademarks.

Due to innovation and the repercussions on the online market, 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 such as OpenSea, MetaMask, Axie and Nifty, to name a few. Famous names have been used in more than 34,000 domains according to the NFT-Related Domains study carried out in January 2022.

Some of these domains host NFT giveaways, limited offers and other attractive content, but 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, owners are also engaging in huge legal battles to take these domains away from gangs specializing in cybersquatting.

How to combat 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 company brands regularly to identify variations with spelling errors registered for use in phishing and spam attacks.

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

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

Once the legal dispute has been won, companies can take the necessary steps to remove 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 domain with spelling mistakes 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.

Although this may cost you some money, the amount you will spend on registering copied domains will certainly not be greater than a data breach, should you become a victim. The average cost of a data breach is currently $4.24 million, almost 10% higher than it was before the pandemic, according to a recent survey by IBM Security. 

This way, companies of all sizes can ensure the integrity of their brands and domains with the help of domain search and monitoring tools.