Another NFT scam might have just occurred, and this is also a big one.
PCGamer reports that the "Minecraft" NFT project known as "Blockverse" has allegedly disappeared after getting $1.2 million from its backers. The project is basically a play-to-earn, PvP "Minecraft" server, which can only be accessed by players who own a relevant token based on the Ethereum blockchain.
The project started off by selling an initial supply of 10,000 NFTs at 0.05 ETH each (around $126 US at the time of this writing). These non-fungible tokens were reportedly sold out in just under eight minutes, as posted here by the creators (dated January 24th):
It wasn't even the only things that they sold during the initial NFT sell-off. According to NFT Ethics on Twitter, the "Minecraft" NFT project also made 792 ETH (just over $2 million) in so-called "secondary sales":
Just heard about the @Blockverse_NFT rug. The project sold out yesterday in less than 8 minutes (500 ETH) and had 792 ETH in secondary sales. Discord & website closed and the anon devs are gone. Do we need a federated entity that approves all NFT projects and its doxxed founders?
— NFT Ethics (@NFTethics) January 25, 2022
After the initial sale, the creators of the project just up and disappeared, deleting their website, Discord and game servers, with no sign of the money anywhere. Eventually, the creators resurfaced after a three-day absence. They posted once again on Twitter to apologize and explain what happened, this time with a link to what looks like an official statement:
According to their statement, it was all still a legitimate project and not just another NFT scam. They said they were receiving numerous complaints about "high gas fees" (i.e. service charges you pay for generating and trading NFTs), which reportedly evolved to harassment and threats towards the dev team.
As a result, they deleted their website, Discord, and game servers, which they say was "out of impulse." However, the replies on their tweet seem to indicate that folks aren't buying the excuse.
Another Year, Another NFT Scam?
It looks like this was just another rug pull attempt trying to take advantage of people who are going crazy for NFTs. But whether it was actually another NFT scam, it wasn't really the first big one of the year. That dubious honor goes to the Frosties NFT rug pull, which happened last January 11th.
Users who bought NFTs from the Frosties collection discovered that the 8,888 tokens they bought were now valued at zero, after they've spent roughly $1.3 million on them, writes BusinessInsider.
As of late, the developers of the Frosties collection have taken down their website, Discord, and Twitter (much like what the "Blockverse" creators did), as well as removed their wallet from the platform OpenSea.
How To Detect An NFT Rug Pull
The non-fungible token fad keeps on going, with more and more people investing in them. Of course, these rug pull scams might be a bit discouraging, but there are ways of detecting them before they snare you in.
According to Forkast, here are the signs that a non-fungible token project is a potential rug pull:
It just appeared out of nowhere: this is not something most legitimate cryptocurrency/DeFi projects do. A true one takes time to develop and market to build up a large-enough following.
The developers never reveal themselves: while cryptocurrency and blockchain tech is technically anonymous, take note that the most profitable ones have clear-cut names and people backing them up.
Suspicious-looking website and sub-par social media presence: once again, a project that comes out of nowhere is a red flag. And if they do, they don't have enough time to build up a reputable online presence.
This article is owned by Tech Times
Written by RJ Pierce
