Non-fungible tokens were arguably the hottest new trend in the cryptocurrency space in 2021. In just one year, trading volume exploded—soaring from a few hundred million dollars in 2020 to nearly $40 billion in the following year.

But what exactly are non-fungible tokens—and what’s the craze surrounding them all about? In order to understand all this, let’s first take a step back and revisit some cryptocurrency jargon.

A primer on cryptocurrencies

A cryptocurrency is a decentralized digital or virtual currency that is secured by cryptography and based on blockchain technology. Cryptocurrencies can be traded as assets, used to make purchases, or act as stores of value. Bitcoin, for example, is the first and most well-known cryptocurrency in existence.

Cryptographic tokens are similar to cryptocurrencies in that they can also be sold, bought, or traded. However, they differ in a key way. While there can only be one “native” cryptocurrency per blockchain, each blockchain can host dozens of tokens—all with their own features and characteristics.

In particular, there are a few different types of tokens out there: reward tokens, currency tokens, utility tokens, security tokens, and asset tokens. For instance, Augur’s Reputation token (REP) is a currency token that’s used to make bets on a prediction market platform built on top of the Ethereum (ETH) blockchain.

Crypto tokens like REP are fungible—that is, they aren’t unique. Rather, they’re divisible and interchangeable. However, non-fungible tokens (NFTs) also exist. Unlike fungible tokens, NFTs are unique, indivisible, and irreplaceable.

NFTs can be used to tokenize one-of-a-kind assets, like works of art, photographs, audio clips, and more. For example, the NBA turned short video clips of LeBron James' dunks into a series of NFTs. Today, they trade for tens or even hundreds of thousands of dollars.

Arguably, this is part of the reason why NFTs are so wildly popular. The holder of that NFT essentially owns the one and only version of the asset out there—allowing them to lay claim to something special and distinct.

However, as is often the case with any fad, craze, or hype, scams are plentiful—and NFT’s are no exception. Every month, millions of dollars are being stolen via treacherous NFT schemes. Among the most infamous are so-called “rug pull” operations, where NFT projects are dropped and funds are transferred to personal wallets immediately after a successful sale.

Unfortunately, fraudulent NFT schemes are so rampant that they are too numerous to count. However, some scams are easily worse (and more notable) than others. Here are 8 of the most notorious ones so far.

Biggest NFT scams

1. Evolved Apes

Evolved Apes was a collection of 10,000 NFTs available for purchase on the NFT marketplace OpenSea. Each issue was meant to be a character in an Evolved Apes fighting game, where NFT owners would pit their apes against one another in battles for Ethereum cryptocurrency rewards.

The project first went live on OpenSea on September 24, 2021, and was introduced by a pseudonymous developer (very aptly) known as Evil Ape. 

Unfortunately, the Evolved Apes project never came to fruition. Soon after its launch, the community discovered that the people who had participated in a marketing-focused social media competition hadn't received their NFT prizes. Later, the community realized that even the artist behind Evolved Apes remained unpaid.

Shortly after, Evil Ape vanished—as did the Evolved Apes website and official Twitter account. Traces left on the blockchain later revealed that a total of $2.8 million had been channeled out of the project fund over a series of several transfers.

A large investor by the pseudonym “Mike_Cryptobull” was later designated to lead an effort to track down the cyber fraudster. However, the suspect has yet to be found, and the investigation continues to this day.

2. Baller Ape Club

On October 1, 2021, the highly anticipated Baller Ape Club NFT drop went live with 5,000 apes available for mint. Launched on OpenSea, the project took inspiration from the highly-acclaimed multi-million-dollar Bored Ape Yacht Club collection.

Trading for roughly two Solana (about $340) per NFT, the Baller Ape Club collection quickly sold out. Shortly after, the project admins deleted their Discord, website, and Twitter accounts. Twitter went viral with investors confirming it was a “rug pull”.

Ultimately, approximately $2 million worth of Solana was stolen by the Baller Ape Club from investors. Despite this, little is known regarding either the whereabouts of the project's developers or the current state of investigations surrounding the scam.

3. SwipaTheFox

In December of 2021 a high-profile NBA player named De'Aaron Fox announced that he would be releasing a collection of NFTs called “SwipaTheFox”—a whimsical series of cartoon pictures depicting wildly-dressed human-looking foxes. The collection had a successful launch, selling over $1.6 million worth of NFTs between January and February of 2022.

A little while later, De'Aaron Fox announced on his SwipaTheFox's Discord channel that he was shutting down the project—claiming he needed to devote more time to his basketball endeavors. Predictably, the community was enraged, accusing Fox of a “rug pull” scheme. 

In the face of the backlash, Mr. Fox offered signed journeys to over 3,000 buyers of his NFTs. While some maintain that Fox—an NBA player with a whopping $163 million contract—had no incentive to pull scams on people, many others have lost hope that they will ever get their money back.

4. CryptoSis

CryptoSis was a collection of 6,069 cartoon illustrations of Lana Rhoades, a former adult entertainment actress. First launched in November 2021, it was marketed on her social media account as a “lucrative investment…that [holders could] sell for more than they paid to mint”. 

Buyers of the NFTs were indirectly promised “instant 2x–5x” gains. However, a couple of months after the launch of the NFT collection, Rhoades disappeared from CryptoSis’ Discord channel, taking with her about $1.5 million worth of ETH.

Though an estimated 6,000 people allegedly got “rugged”, Rhoades herself continues to defend her actions by claiming the project was marketed as an investment—not a sale. No legal actions have been taken against the former adult star as of this day.

5. Jacked Ape Club

The Jacked Ape Club was a collection of 8,888 NFTs. Each tokenized cartoon depicted a distinctively-dressed and conspicuously muscular primate—hence the name of the series.

Started in January 2022, the Jacked Ape Club was tied to social media stars Bradley Martyn, Helloimmorgan, and a few others. After about a month and an estimated sale of around 3,200 NFTs, $1.4 million in ETH was allegedly siphoned off to 13 different wallets.

After the incident, several members were reportedly removed from the project. The remaining developers promised to return 80 ETH (around $270,000) in stolen funds back to the community wallet.

6. Big Daddy Ape Club

The Big Daddy Ape Club was a collection of 2,222 ape-themed tokens that piggybacked off the success of the popular, billion-dollar Bored Ape Yacht Club. (See a pattern here?)

On December 23rd, 2021, it was verified by Civic, an decentralized identity-verification tool that greenlights NFT projects—(supposedly) keeping them safe, bot-free, and out of the hands of fraudulent sponsors.

However, just two weeks later after the 2,222 NFTs were minted, the creators—along with $1.3 million—suddenly disappeared. Shortly after, their Twitter, Discord, and the collection’s official website were all deactivated.

It was later uncovered that the Big Daddy Ape Club was not the first scam the group of unidentified developers had pulled off. Currently, Civic is cooperating with law enforcement to assist in their investigation. However, it’s unclear how long it will take.

7. Blockverse

Blockverse was a special server for Minecraft where participants dueling in multiplayer modes could earn NFTs in-game. Access to it was granted only to people who already had at least one token. When the server launched in January 2022, 10,000 NFTs were made available, and each token retailed for about $124.

Within just eight hours, they were all bought up. However, just a few days after the launch of the sale, Blockverse was shut down, and both its official website and Discord server were deleted as well.

Then, the creators went off the radar entirely, an act that was largely seen as proof that the project was a scam. In total, Blockverse’s creators stole $1.2 million from investors.

A few days after this incident, they re-emerged with a statement asserting that the project was not a scam—and that rising energy prices, insufficient server bandwidth and increasing player demands had made them panic instead.

However, the project has not seen any further development since Meanwhile, NFT buyers have yet to see their money back.

8. Frosties

Frosties was an 8,888-item NFT project that featured ice cream-themed artworks. In January, two 20-year-old men—Ethan Vinh Nguyen and Andre Marcus Quiddaoen Llacuna—launched the project on OpenSea. Frosties reportedly sold out within hours of its release, and the duo raised a total of $1.1 million.

But just a short few hours after the release, both Nguyen and Llacuna disappeared, shutting down the official website and the 25,000-member Discord channel—right as they transferred all the funds into their own cryptocurrency wallets.

The pair were later arrested on charges of conspiracy to commit wire fraud and conspiracy to commit money laundering. Though they face a lengthy maximum prison sentence of 20 years, it’s unlikely that buyers will ever get their money back.

Conclusion

NFT scams have lured away millions of dollars’ worth of cryptocurrencies from the pockets of unsuspecting buyers.

While many of the mentioned scams have yet to be resolved, one thing is for certain: as long as buyers remain naive, scammers will continue to find creative ways to defraud people of their money.

Even more distressingly, these unscrupulous grifters will prey on the dual qualities that make cryptocurrencies and digital tokens stand out—their untraceable nature and red-hot consumer appeal.

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