Top 6 NFT Rug Pulls
Global interest in non-fungible tokens (NFTs) surged in 2021 with total trading volume exceeding $13 billion according to research from The Block.
This figure comes in stark contrast to the year before that when NFT trading volume barely reached $33 million.
The media is rife with reports of people making substantial amounts of money in this booming sector, adding fuel to the mania.
In this article, we have created a list of the top NFT rug pulls as they are called, where project founders have run away with investors’ funds and failed to deliver on their promises.
The ranking is based on the total amount of money that was stolen in the process.
NFT Rug Pull List
6. Iconics — $140,000
Iconics, an NFT project based on the Solana blockchain was supposed to deliver 8,000 randomized 3D artworks to investors.
In the pre-sale, 2000 pieces were sold for 0.5 SOL each, worth around $140,000 at the time.
Instead of receiving the artwork they were promised, investors found a random collection of emojis in their wallets leading them to share their ordeal all over social media.
Shortly after, the alleged 17-year-old artist behind the project deleted the Iconics’ Twitter account and disabled the chat feature in the Discord group.
Due to the anonymous nature of cryptocurrencies, it is unknown whether the perpetrators will ever be caught and held accountable for their actions.
And unfortunately, this rug pull is just one of many that have occurred in the past 12 months with no sign of these scams slowing down.
5. Fake Banksy NFT — $336,000
For those who don’t know, Banksy is a pseudonymous street artist based in the UK whose artwork has previously been sold for tens of millions of dollars.
The real identity of the elusive artist remains unknown which has added to the mystery and intrigue surrounding the artwork.
Much like other artists, Banksy has a website where he showcases his portfolio and this is where the scam occurred.
A well-known NFT collector by the name of Pranksy was browsing through a Discord channel when someone shared a link to Banksy’s website, informing him that a new page called ‘NFT’ had been created.
The page included a link to a website that was holding an auction for an NFT called Great Redistribution of the Climate Change Disaster.
After some due diligence, Pranksy decided to bid far above the others and the auction ended shortly after.
In total, he paid around $336,000 for the NFT but started to wonder whether the listing had been fraudulent after he realized all traces of the NFT auction had suddenly disappeared from the Banksy website.
As we have seen, the hackers could walk away at this time and there would be little anyone could do to get the funds back.
But in an unlikely turn of events, the funds were refunded a few hours later with no indication of the reasons why.
It remains unknown whether this whole incident was an elaborate hoax orchestrated by Banksy himself, or whether his website had just been hijacked by scammers.
4. Frosties NFT — $1.3 million
The Frosties NFT project was promising huge plans for their investors including a staking feature that would allow NFT owners to earn a share of the generated revenue, a metaverse game and much more.
However, shortly after selling out the 8,888 pieces, investors discovered that the developers had deactivated all of the project’s social media accounts.
Indeed, this is a common tactic used by scammers to prevent authorities from being able to track their whereabouts and to perhaps thwart any attempts by community members to band together to find the culprits.
In total, the scammers made off with $1.3 million, and again, it remains unknown whether the investors will ever get their money back.
3. Baller Ape Club — $2 million
Baller Ape Club was a collection of 5,000 NFTs sold at a price of 2 SOL each, worth around $2 million in total at the time.
As is common for these types of scams, the project admins deleted all related social media accounts directly after the sale, leaving no traces to be found.
Investors then took to social media to complain about the ordeal but at that point, it was already too late to get their money back as the cryptocurrency had left their accounts.
Blockchain analysis teams have identified the wallets that were involved and are investigating the incident. However, it is unlikely that the investors will ever get their money back.
2. Evolved Apes — $2.7 million
Evolved Apes was a 10,000-piece NFT project that promised investors a game that would enable the characters to battle each other and win rewards.
However, in line with other NFT scams that have happened over the past 12 months or so, the developers suddenly disappeared after the sale and deleted the social media accounts associated with the project.
In total, the anonymous developer known simply as ‘Evil Ape’ stole around $2.7 million which included funds that were supposed to be used for project-related expenses such as marketing and game development.
It later became apparent that competition winners had not been given their NFT prizes and that the artist hadn’t been paid either.
The prices of the NFTs have fallen significantly lower than their minting price on secondary markets and at the time of writing, the trading activity has largely ground to a halt.
It remains to be seen whether the investors will ever get their money back but if previous incidents are anything to go by then it seems highly unlikely.
1. Azuki — $100,000,000+
Azuki is a collection of 10,000 avatars that give owners access to The Garden, where artists, builders, and crypto enthusiasts can meet and create decentralized products.
Azuki’s founder, Zagabond, published a blog post on 9 May 2022, revealing his involvement in three previous NFT projects which were later abandoned: CryptoPhunks, CryptoZunks, and Tendies.
He explained that Azuki was built on learnings from these previous projects however, this news was not taken kindly by Azuki holders who were shocked to find out about the founder’s shady past.
Speculation quickly spread online that Zagabond could also abandon Azuki at any moment which caused panic selling to ensue resulting in the floor price on Azuki avatars falling by nearly 50% within hours — reducing the market cap of the project by hundreds of millions of dollars.
The lack of transparency by the founder does not technically constitute a “rug pull”, however, the market reaction suggests otherwise.