Unfortunately, rug pulls are a common occurrence in the crypto industry, and the NFT niche is no different. To stop you from getting duped this way, let’s check out some of the most obvious red flags, as well as the biggest scams to date.
What are the red flags?
Pay attention to these:
- Research the founding team – check social media pages and LinkedIn profiles. A doxed team is always a safer bet than an anonymous one.
- Check the website of the project – does it seem amateurish, is it slow, or riddled with spelling mistakes?
- Check for disproportionate numbers of social media followers – a smaller number of Twitter followers coupled with a huge following on Discord could be an indication that the team is purchasing bots to generate artificial interest.
- Analyze the purchase history with NFT explorer – a useful tool that provides data and metrics (including sales activity) with corresponding wallet IDs.
Now, on to the most infamous NFT rug pulls:
1. Frosties
The Ethereum-based NFT collection is one of the most notable NFT scams of 2022 in which $1.1M was stolen.
This one is scary because the project looked trustworthy and offered serious potential for investors and holders. For instance, investors were promised tokens, rewards, as well as access to a game that was supposedly planned.
However, once Frosties Discord vanished along with the Twitter profile, it became apparent that investors were victims of a scam.
2. Bored Bunny
This NFT collection gained a lot of traction due to hype from celebrities such as Floyd Mayweather and Jake Paul.
After the entire collection sold out, investors soon realized the floor prices went down and the creators went missing. Around $21M was stolen.
There were a couple of red flags from the beginning that many have overlooked. For instance, a wallet belonging to the developer was buying up celebrity NFTs before the launch itself. This is one of the reasons why you should always keep track of the purchase history of NFTs you’re looking to buy.
3. Big Daddy Ape Club
Earlier this year, one of the biggest NFT rug pulls on the Solana blockchain happened when people behind Big Daddy Ape Club NFTs ran off with $1.3M.
Because everything ape-themed sells out like hotcakes, so did this collection. Collectors sent in funds to mint these NFTs – which never existed.
The concerning thing about this particular scam is that the NFT drop was verified by a company called Civic, a decentralized identity verification company.
4. Blockverse
Created by an anonymous team, Blockverse quickly sold out – although the team behind them wasn’t doxed.
Developers simply disappeared with the money after erasing both their website and the Discord server from existence. The project generated around $1.9M in trading volume, making it one of the most notorious NFT rug pulls ever.
5. Swipathefox
NBA basketball player De’Aaron Fox stole over $1.5M through his Swipathefox project.
He offered exclusive perks like giveaways and exclusive chats with himself along with the opportunity to own 6000 one-of-a-kind fox-themed NFTs.
Fox stated that he stretched himself too thin by launching the project in the middle of an NBA season.
6. Mercenary
Despite heavy promotion on sites like BSC News, a medieval-themed NFT game Mercenary ended in a rug pull.
Everything connected to it was completely wiped from the internet, with only a trail of paid promotions on Twitter remaining as proof this project ever existed.
The team behind this game ran off with around $760k.
7. Baller Ape Club & Evolved Apes
Another set of ape-themed NFTs turned out to be a scam as the creator of these two projects stole around $4.7M from collectors.
Collectors reportedly noticed red flags from the beginning but were convinced these NFTs would be the next best thing.
The creator, appropriately named ‘’Evil Ape’’, erased all social media platforms after the public mint, scamming both the community and the artist.
8. Eternal Beings
Another celebrity that’s become infamous for NFT scams is rapper Lil Uzi. The Eternal Beings collection quickly sold out after he hyped it up to around 8M of his Twitter followers.
Not long afterward, Uzi deleted all the posts about Eternal Beings and completely abandoned the project.
As a result, the price of the NFTs dropped from its average mint price of 2.5 SOL to around 0.13 SOL, which at the time of writing is around $0.035.
9. Doodled Dragons
Doodled Dragons were sold for a very low price of around 1.50 SOL, and the project’s founder claimed they will donate all the proceeds to charity.
It all turned out to be a scam after the founder tweeted that the charity of choice was his bank account. Reportedly, they ran off with $30k.
10. Doodle Apes
In the case of this NFT collection on the Binance Smart Chain, the team was legitimate – but the founder was a known scammer.
Going by the name of Jinx, they repeatedly used mint revenue from abandoned projects to start new ones – Doodle Apes included. While they technically did pay the community, they still decided to ignore the roadmap promises.
Luckily, a new investor decided to take over the entire project and is moving the NFTs to a new contract address.
All Comments