Although endorsement by numerous A-list celebrities accelerated the rise of non-fungible tokens (NFTsfor its acronym in English) of 2021 and 2022, some promoted unverified projects to fans without knowing if they were legit or scams. The practice maintains its popularity in 2023 as markets recover.
We just tricked Dillon Danis into promoting a fake NFT project. We paid him $1,000 to post, he didn’t disclose it was an #ADand posted copy that literally spells out SCAM pic.twitter.com/SVo2SCoN9q
—Coffeezilla (@coffeebreak_YT) February 3, 2023
We just tricked Dillon Danis into promoting a fake NFT project. We paid him $1,000 to post, he didn’t reveal it was advertising, and he posted a copy that literally reads SCAM.
In the promo, Danis tweeted a digital image with the URL of a website where, according to Coffeezilla, “the acronym SCAM appears literally”. Further investigation by Cointelegraph shows that the website was created only recently, on February 1, 2023, an important clue when it comes to checking the credibility of new projects.
In addition, the website’s FAQ mentions that no investor can get hold of “Sourz” NFTsa crucial piece of information that the MMA fighter overlooked.
A similar incident involving Kim Kardashian was designated in June 2021 by the United States Securities and Exchange Commission (SEC) when promoted the EthereumMax (EMAX) crypto token to his 330 million followers on Instagram. According to the SEC, Kardashian violated the anti-promotion provision of the Securities Act by failing to disclose the $250,000 she received from the promotion..
However, Coffeezilla made sure that users who fell for the NFT project scam were notified immediately. When users click the “Mint Sourz” button (as shown in the screenshot above), they are redirected to a website that warns of a possible scam.
While Coffeezilla plans to share more information via follow-up video, the incident is a strong reminder for influencers and investors to do their own research before promoting or investing in a project.
Little Shapes NFT, a project launched in November 2021, was a “Social Experiment” Designed to Shed Light on Large-Scale Twitter Botnet NFT Scamsaccording to the founder pseudonym Atto.
Thanks for participating everyone – Little Shapes was a social experiment by @BALLZNFT_
The exposed was real though. Here’s how a ring of influencers and founders drained $200,000,000+ out of the ecosystem over 274 projects: https://t.co/BKMSqPVwzw
(158 Pages) pic.twitter.com/gB5v21NCRo
— Little Shapes NFT (BALLZ) (@LittleShapesNFT) February 1, 2023
Thank you all for participating – Little Shapes was a social experiment by @BALLZNFT_
However, the complaint was real. Here’s how influencers and founders drained over $200,000,000 from the ecosystem with over 274 projects.
“I needed a story that would sell to make sure no one would ignore a story that hurts,” Atto said in explaining his intention to launch the NFT project.
Little Shapes was marketed as an avatar-style project with 4,444 NFTs that would allow owners to interact and change artwork in real time..
Clarification: The information and/or opinions expressed in this article do not necessarily represent the views or editorial line of Cointelegraph. The information presented here should not be taken as financial advice or investment recommendation. All investment and commercial movement involve risks and it is the responsibility of each person to do their due research before making an investment decision.
Investments in crypto assets are not regulated. They may not be suitable for retail investors and the entire amount invested may be lost. The services or products offered are not directed or accessible to investors in Spain.