There is another pandemic infecting investors, that is deadlier than Covid-19. “Rug pull” isn’t a word that has any positive connotations attached to it. The collateral damage of losing a lot of money on useless Tokens and total economic despair will be felt by many. “Rug pull” leaves the NFT community members orphaned, picking up the scraps of a failed investment, while the founders have fled with golden parachutes. In an effort to police the NFT Metaverse, exchanges like OpenSea have delisted such NFT projects entirely, but new NFT projects are being created at an alarming rate.
NFT’s/Token’s original rug pull company will launch version 2.0 of the Token/NFT before a new investor can collaborate with the victimized Alpha group. In order to double dip on further proceeds, the original Token company claims all “so-called problems” with its Token or NFT have been resolved, plotting yet another rug pull on its community members and Token holders. Does this sound a little bit like fraud? If you are nodding your head in agreement, I believe that is the textbook definition.
Rug pulls in recent years have served as evergreen reminders of the risks associated with NFT/Tokens. We’ve compiled a short list of some of the most memorable (and costly) events in ecosystem history. The bright side of these events is that they have helped educate people about identifying and avoiding NFT scams.
Frosties freeze rug pull nets $1.3 million
Frosties, launched on January 7, 2022, was an ice cream-themed collection of 8,888 NFTs that marketed itself as “cool, delectable, and unique”. Ethan Nguyen (known as “Frostie”) and Andre Llacuna (known as “Heyandre”), the two founders of the project, had already been able to build up a sizable community in their Discord channel, as well as promised collectors merch, raffles and a fund in the hope of ensuring the project’s success for the long term.
It was estimated that the NFTs would sell for 0.04 ETH each, so, after the collection had been sold out a few hours later, the team behind the project had been able to generate 335 ETH – just over a million dollars. There was a brief period of time where the project’s website and Discord dropped, and the funds from the sale were transferred to a variety of wallets; the founders were now ghosts.
Evil Ape dupes the Evolved Apes NFT community
The founder of Evolution Ape, known as Evil Ape, stole 798 ETH ($2.7 million) from investors just a week after the collection launched. The Twitter account and project website of Evil Ape are no longer available.
The Evolved Apes project was originally intended to be a fight game, but has now become just another scammer rug pull statistic.
MintySwap , Swaps investor dollars for Lamborghinis
Layth Samarah created MintySwap Token to fund his Lamborghinis, houses, and vacations using investor money. Developing Legends of Mintonia, a game that earns Minty tokens, was a lie, used to sell project tokens and deposit money into exchange accounts, estimated at $2-3 million. Hundreds of people have been scammed out of millions of dollars by Layth’s Token Minty-swap by blacklisting their wallets (preventing them from using the contract, transferring, or selling their investments). When people start asking questions, Layth then blocks and kicks them out of the investment chat.
MintySwap also sold 10,000 copies of its NFT called “Mintonians” stealing funds from investors, claiming that a so-called “Whale” purchased all of these NFTs when Layth himself sold “mintys” Tokens and bought mintonians, misleading investors.
Openseas has now permanently delisted mintonians NFT which deems them 100% worthless. Users were supposed to receive a certain amount of staking rewards with each mintonian, but the amount has changed 4-5 times since initial promises. Mintonians were only purchased because of the staking reward promise. Token holders have either not received their Tokens or the investors money has gone straight into the founders account. Mintyswaps platform is now planning a 2.0 release, Buyers Beware!
Delisted MintySwap Tokens