The Biggest NFT Scandals in History

Apr 24, 2023 | Articles, Finance

Non-fungible tokens, or NFTs like the ones offered on Chainers, are digital assets that have taken the world by storm. From digital art and collectibles to virtual real estate and gaming items, these blockchain-based tokens are changing the way we view and invest in assets. But with the boom in popularity comes risks, and some unscrupulous actors have taken advantage of eager investors. In this blog post, we’ll take a look at some of the biggest NFT rug pulls in history and what we can learn from them.

1. The Save The Kids Token Rug Pull

In June 2021, the Save The Kids Token was launched on the Binance Smart Chain with the aim of donating a portion of the profits to children’s charities. The project quickly gained traction and raised over $3 million in just two hours. However, it was soon discovered that the founders had drained the liquidity pool and sold their tokens, leaving investors with worthless coins. The incident highlights the importance of due diligence and research before investing in any project.

2. The Stoner Cats NFT Scandal
Stoner Cats, an NFT project featuring animated cats voiced by celebrities, was launched in July 2021 with great fanfare. However, it was soon discovered that only a select few were able to buy the NFTs, leading to accusations of insider trading. In addition, the project was found to have plagiarized the artwork, leading to a backlash from the art community. The incident highlights the need for transparency and honesty in NFT projects.

3. The Pudgy Penguin NFT Exit Scam
Pudgy Penguin, a popular NFT project featuring adorable cartoon penguins, was launched in August 2021 and quickly became a hit with investors. However, just a few weeks later, the project’s developers disappeared with the funds, leaving investors with useless tokens. The incident serves as a reminder to always be wary of new projects and to never invest more than you can afford to lose.

4. The Bored Ape Yacht Club Hack

The Bored Ape Yacht Club is one of the most popular NFT projects to date, with each ape NFT selling for hundreds of thousands or even millions of dollars. However, in September 2021, hackers exploited a bug in the smart contract and stole over $90 million worth of ether. The incident highlights the need for strong security measures and auditing in any blockchain-based project.

5. The Iron Finance Titan Token Collapse
In June 2021, Iron Finance launched the Titan token, which was backed by a stablecoin known as Iron. The project gained a significant following and reached a market cap of over $2 billion. However, a sudden panic sell-off caused the stablecoin’s value to plummet, triggering a massive collapse of the Titan token. The incident shows the dangers of complex financial instruments and the importance of risk management.

NFTs have opened up a whole new world of investment opportunities, but they also come with risks. As we’ve seen with the examples above, some NFT projects may be scams or have hidden vulnerabilities. It’s essential to do thorough research and due diligence before investing in any project, and to never risk more than you can afford to lose. By being aware of the risks and keeping a level head, investors can navigate the NFT landscape with confidence and enjoy the many benefits of this exciting new technology.

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Thomas B.