Non-fungible Tokens have been here since 2014. But now they are becoming a popular way to buy and sell digital work online. NFT is a digital asset representing real-world things like music, art, videos, and games.
Crypto enthusiasts have spent millions of dollars on NFTs. The value of an NFT depends on how much the buyer is willing to spend. The non-fungibility feature of these tokens makes it a risky investment. Transactions that involve physical money and cryptocurrencies give the investor confidence. Since they can be traded and exchanged for one another, you cannot exchange NFT with an NFT. One person can only own an NFT like artwork at a time.
Despite the NFT investment wave, the chance to get scammed is very high. It is a common incident that, as an NFT collector, you carry the risk of being either a fraud or theft victim.
The Kitten NFT Scam
It is a story of how crypto and NFTs can become big scams. In November 2021, the @CoolKittensNFT Twitter handle announced a new NFT project to sell a remarkably massive number of kitten drawings. It drew the attention of people. In a few weeks, the account attracted more than 20,000 followers.
The buyers of the kitten drawings were promised a cat-art digital token, $PURR cryptocurrency, and a Decentralised Autonomous Organisation (DAO) membership. DAO is an online community for non-fungible token enthusiasts. Members of DAO have voting power.
In less than a month, the minting process began: creating and converting digital assets to NFTs. The cool kittens went for sale. Nothing seemed odd at the beginning. The developers had a well-laid-out map to the buyers, but the deal was too good to be true.
In a few hours, 2,216 NFTs sold at $70 each. The sellers made approximately a total amount of $160,000. The buyers who hoped that the price of the kittens would hike and make huge profits were all invited into a Discord chatroom.
At first, the chatroom was full of excited buyers. After a while, the silence of 25,000 registered users triggered an alarm. The users demanded the fulfilment of the $PURR cryptocurrency promise. Their demands fell on deaf ears. The developers deleted the chatroom and ghosted the buyers.
One buyer named Yosan, who bought three NFTs, says that he liked the artwork, and there were no red flags on developers for they were interactive until it was too late. On the internet, blockchains operate on codes. So, it is easy for buyers to get scammed.
A user noticed the chatroom was full of chatbots advising them to sell the NFTs at a higher price. The presence of many bots made them realise they have been defrauded. The users came together to retaliate.
They hired a developer and an NFT artist. The developer collected the addresses of Cool Kittens buyers. The artist designed more than 2000 electronic artworks for Kitten Coup’s project. The team delisted the scam NFTs through Eden Crypto Marketplace to ensure the profits gained from Kitten Coup NFTs would not go to the hoaxers.
A win for the Kitten Coup. A loss for the Cool Kitten hoaxers. The Kitten Coup got scammed and then took sweet revenge on the scammers.
True, there are great opportunities to invest in the crypt space, it is important to beware of such scams. SCAM Help can work with victims to explore chances of recovering lost funds. Have you just been scammed? Please contact Scam Help for a way forward.
