$1.1 million NFT scam: Lessons learned

REV3AL creates technology protecting NFT authenticity to meet industry concerns as scammers steal 356.56 ETH through NFT project rugpull

Fresh concerns regarding shady NFT projects and investments come to light after two offenders were charged for their roles in a $1 million NFT fraud scheme. This news serves as a timely reminder of the dominance of fraudulent activities and efforts to combat this market epidemic.

Helping to prevent similar occurrences, REV3AL develops a state-of-the-art technology that protects the originality and authenticity of NFTs, to ensure all end-users receive genuine NFTs.

How do NFT scams work?

Cryptocurrency scammers target vulnerable people using false promises that are often too good to be true. NFT scams can also be perpetrated by project developers who design smart contracts with hidden back doors.

The criminal investigation team of the IRS arrested Ethan Nguyen and Andre Llacuna for their roles in a fraudulent NFT scheme. The defendants advertised a project named Frosties through false promises. After raising $1.1 million from their token sale, Nguyen and Llacuna pulled the rug on the project and sent proceeds from Frosties sales to multiple wallets under their ownership. The defendants now face money laundering and fraud charges.

Thanks to Coinbase’s KYC measures, the investigators matched the IP addresses used for promoting the Frosties NFTs on Discord to the fraudsters’ Coinbase accounts.

Use REV3AL technology

Now, there’s no need for crypto investors to fall victim. REV3AL’s patented tech, made from blockchain and non-blockchain resources, allows creators to upload and apply REV3AL technology into NFTs to authenticate tokens to prevent NFT rugpulls. Original NFT holders can verify and upload their authentic NFTs using REV3AL to improve the value of their collection.

In a recent blog post, REV3AL wrote:

“We incorporate several layers of authentication features from each category to create a robust anti-counterfeit solution. Think of this as a door with multiple locks requiring different keys, passcodes, biometrics, and other security measures. Most thieves might be able to pick a lock or crack a code, but they cannot do it all.”

Thus, REV3AL technology challenges scammers and makes fraudulent schemes too difficult to be rewarding.

Ways to spot NFT scams

REV3AL technology is useful for preventing scams and the Frosties scam indicates that US law enforcement is ramping up its efforts to prevent NFT rug pulls and other fraudulent activities. However, their task is made more difficult with the ease with which anyone can duplicate and distribute NFTs.

Here are some ways to spot and avoid NFT scams:

Identify the team

If you find an NFT project with anonymous founders, consider this the first and biggest red flag. Avoid giving your hard-earned money to shady developers and dubious people.

Avoid suspicious links

Be cautious when clicking on attachments or links related to NFTs from unknown senders. Hackers use phishing emails to compromise MetaMask wallet credentials.

Cross-check NFT costs

A scam is most likely in play when you see NFTs sold for less than advertised on legitimate trading sites, such as OpenSea or Rarible.

NFT technology only proves on-chain ownership. It does not guarantee copyright protection and intellectual property rights. Thus, it makes it vital to enforce copyright protection both on and off chain. However, the fact that most NFT scammers are tech-savvy, does not help.

By implementing all above advice, scammers will have a tough time finding new victims. Then, the NFT space becomes a safer place.

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