Report post

Are NFT 'rug pulls' a scam?

“Rug pulls,”a notorious type of scam in the NFT world, now cost investors hundreds of millions of dollars a year. But it was only just this month when federal law enforcement officials bagged their first NFT “rug pull” suspects.

What is a rug pull scam?

In the Web3 space, the term for the most common type of scam is “rug pull” — the founders of an NFT project pull the rug out from under its investors by disappearing with whatever funds they’ve amassed at the time. Chainalysis estimates that as much as $280 million was stolen from investors in rug pulls in 2021 alone.

Why did Nguyen & Llacuna abandon NFT?

Nguyen and Llacuna purportedly collected $1.1 million from NFT buyers in January and then abandoned the project — in other words, pulled the rug out from under them. According to the government, the pair wereplotting a second scheme right before they got caught.

Who is an example of a rug pull?

Athletes are a visible example, with NBA star De’Aaron Fox accused of a rug pull after his Swipathefox project collected $1. 5 million and shut down without delivering the promised benefits, or the Player’s Only NFT effort promoted by athletes like Michael Carter-Williams and Jerami Grant, which pulled in $1.

The World's Leading Crypto Trading Platform

Get my welcome gifts