Metroverse blockchain game implodes

An isometric rendering of a square tile on which there are multiple city buildings including skyscrapers and futuristic structures, rendered in neon colors.Block #6086 (attribution)
The Metroverse NFT-based game caught the end of the 2021–22 crypto bull market, minting the Genesis collection in January 2022. The project sold out quickly, netting the project creators 2,000 ETH (~$6.3 million) from the mint alone, not to mention 5% royalties on the 25,361 ETH in trading volume since. The project promised to deliver a "land trading NFT strategy game" with mechanics they said would be "similar to Sim City", and flashy artwork drew in an excited fanbase.

Ultimately, the project delivered a game that was a far cry from Sim City, and which only a small subset of players designated as "leaders" could even play. As interest in NFTs and crypto prices began to fall, the community became increasingly dissatisfied with the project creators, who they felt had delivered a subpar game, engaged in an additional cashgrab mint, and took actions like performing a reverse-split of the token which they believed harmed secondary market prices.

Tensions emerged between the project team and the community, with the project team dismissing all criticism as "FUD" and accusing their community members of "sabotage", and community members accusing the project team of rug-pulling and failing to listen to feedback. The team shut down the project Discord, claiming that the community was only making it harder for them to do what they had promised to do, and saying that the attacks were damaging to their mental health. The team promised to complete the last item on the roadmap, but stated that they would not be continuing to develop the project or add additional roadmap items due to the current NFT markets and the "non-stop attacks from the community".

Very shortly after closing the Discord, the project team changed their mind and announced that they would be closing the project entirely. They announced that the upcoming battle would be the last available to play, but that they would be airdropping tokens to players as promised in the last item on the roadmap, and open-sourcing the code. Multiple project team members deleted their social media, and project AMAs were wiped from the Metroverse YouTube channel.

These gestures were far from enough to satisfy an angry community, some of whom threatened to dox the anonymous team behind the game or take legal action against the founders. The team themselves fired back with legal threats, contacting community members to tell them that they believed their conversations on a separate Discord server involved illegal activities that are "not only morally reprehensible but may also constitute serious criminal offenses".

Some community members claimed to have spent tens of thousands of dollars on the project. "I spen[t] like 25 eth at 3k" wrote one. "I spen[t] 250k" shared another.

Crypto investment scheme with links to UK Parliament vanishes

The Guardian published a report on Phoenix Community Capital, a cryptocurrency investment project that solicited investments in part based on credibility it built by ingratiating itself with parliament. The firm drew in approximately 8,000 investors, some of whom put in tens of thousands of pounds, before vanishing in September: the website went offline, and portfolio accounts became inaccessible. A post to the company's Twitter account reported the firm was "under new management", but the new company has said they have no obligation to make previous investors whole.

The firm built credibility by sponsoring an APPG — all-party parliamentary group — and its co-founder, Luke Sullivan, was active as a speaker for parliamentary groups and events hosted by MPs. The firm promoted itself based on these ties to the UK government, including by publishing a blog post about how they "brought the Metaverse to the Palace of Westminster".

Some investors say they have lost more than $100,000 each. One such investor is Alan Rogers, a former Premier League footballer who sunk around $50,000 into the rather Ponzi-looking scheme.

Friendsies NFT project rug pulls

A 3D figure with a red heart-shaped head with a propeller hat, with a yellow body with black lines on it, holding a pink spiked mace, wearing green shoes, floating in the air in a sunny backgroundFriendsies #2048 (attribution)
After earning $5.3 million in their initial sale, creators of the Friendsies NFT project suddenly announced they would be "pausing" their project due to "market volatility". The project promised buyers "a companion for the metaverse and beyond", that would "be your AR/AI friend to help guide you for life", and that they would eventually develop a "Tomogatchi-like game that is play-to-earn". No game ever emerged, nor did promises of a community treasury or other plans to "build out the brand".

After partnering with the renowned auction house Christies to sell nine early-access mint passes, the NFTs were launched in April 2022. Each one started minting at 3.33 ETH in a Dutch auction, which at the time was around $12,000. Now, the NFTs have been selling for around 0.01 ETH (~$17).

The project's social media accounts went dormant late in 2022. On February 21, 2023, the project announced that "As the project founders, we have decided that it would be best to put a pause on Friendsies and all future digital goods for the time being... However the volatility and challenges of the market have made it very difficult to move this project forward in a way we can be proud of. For now, we have decided that it's best to allow the space to further mature." Some who asked questions like "So no AI friendsies as promised in your roadmap? What's going on?" found themselves blocked, and shortly afterwards the project deleted its Twitter account.

After being called out by crypto sleuth zachxbt for rug-pulling, the Twitter account returned to insist that they were not rug-pulling, and that "we were overwhelmed with hate and threats". Some Friendsies holders also blamed crypto influencers who had promoted the project near the beginning.

Logan Paul slapped with a class action lawsuit over CryptoZoo rugpull

A pixel art bear with a duckling(?) headA "Bearling" zoo creature from Paul's promised CryptoZoo game (attribution)
Logan Paul is now facing a class action lawsuit over his CryptoZoo project, a planned NFT game that Paul apparently lost interest in and abandoned — after profiting handsomely, of course, off his fans who put millions into the project.

Scam sleuth CoffeeZilla dug into the project in a multipart YouTube series recently, drawing legal threats from Paul. After plenty of negative publicity, Paul withdrew the legal threats and promised to develop a refund plan for some of the funds that were invested, though it is a small fraction of the money lost in the project.

Rather than wait to see if Paul comes through with refunding only a small portion of their money, a group has formed a class action lawsuit against Paul and others who helped with the project. The lead plaintiff put a total of around $3,000 into the project altogether.

The suit accuses Paul and his team of a whole host of charges including fraud, breach of contract, unjust enrichment, deceptive trade practices, negligence, and fraudulent misrepresentation.

Rally sidechain shuts down with under a day's notice, taking users' tokens with it

Rally is an Ethereum sidechain built to support "social tokens" — typically, tokens intended for fans of various celebrities or groups.

Fans of creators including Felicia Day (actress and famous nerd), Brandon Powell (LA Rams wide receiver), and Portugal. The Man (rock band) may be disappointed, however, because Rally announced with under one day of notice that they would be shutting down. "This means that after today, the site will no longer be supported and you may experience a degradation in services or it may simply become inoperable. Additionally, since NFTs on the Rally sidechain are not transferable to mainnet, these will not be accessible once the site shuts down," they wrote in an email. The project also deleted its Twitter account.

The group behind the Rally Network had raised $57 million in funding in 2021, and was backed by VCs including Andreessen Horowitz.

Developer of Mutant Ape Planet NFT project charged in $2.9 million rug pull

An ape with green melting skin, wearing a hat with gravestones embedded in it. Its eyeballs are bloodshot with Xs on them and it has a katana slung on its back.Mutant Ape Planet #4076 (attribution)
The U.S. Attorney's Office of the Eastern District of New York announced fraud charges against Aurelien Michel, a 24-year-old French national living in Dubai. Michel, under the alias "James", had created an NFT project called Mutant Ape Planet, which minted in February 2022. He collected $2.9 million in proceeds from the project, which promised an extensive roadmap: hundreds of thousands of dollars to be put towards marketing, community raffles, merchandise, a project crypto token with staking features, metaverse land acquisition, etc. However, none of this ever came to be.

Michel said in his defense that he "never intended to rug but the community went way too toxic". In a press release, an IRS Special Agent stated, "Michel can no longer blame the NFT community for his criminal behavior."

Mutant Ape Planet — though clearly based on it — is unaffiliated with the Mutant Ape Yacht Club project, a Yuga Labs-created spin-off of their own Bored Ape Yacht Club.

Logan Paul threatens to sue CoffeeZilla for exposing his (alleged) grift

A pixel art bear with a duckling(?) headA "Bearling" zoo creature from Paul's promised CryptoZoo game (attribution)
Influencer-turned-(alleged)-crypto-grifter Logan Paul has threatened to sue scam researcher CoffeeZilla, who has exposed Paul's "CryptoZoo" blockchain game project as his latest (alleged) scam. Paul's (alleged) scam history is not to be confused with any of the other long list of (alleged) crypto scams perpetrated by his brother, Jake, which CoffeeZilla has also helped expose.

After many attempts over the span of a year to contact Paul, directly and via his manager (who CoffeeZilla did speak with), Paul has claimed that CoffeeZilla made no attempts to get his side of the story. Instead of addressing any of the many well-researched claims about the flagrant (alleged) grift that Paul has been perpetrating, he has instead reacted in typical (alleged) cryptoscammer fashion: by threatening to sue CoffeeZilla.

Defrost Finance fails to rug pull

Defrost Finance, a defi trading platform built on the Avalanche Network, apparently tried and failed to rug pull its users. The project claimed on December 23 that they were "sad to announce that our V2 has suffered a hack, with an attacker using a flash loan function to withdraw funds". They later announced that this "hacker" had also managed to exploit the v1 version of their project. Altogether, it appeared that tokens valued at around $12 million had been stolen.

Observers were quick to notice that the "hack" was made possible by the addition of a fake collateral token, which was then manipulated to liquidate the protocol's users, suggesting the "hack" was likely an inside job.

On December 26, Defrost claimed that the "hacker" had miraculously returned the money. The announcement didn't seem to convince the project's users, who left comments like, "It was never hacked. You tried to rug your users".

Defrost Finance's team had previously run a project called FinNexus, which also suffered a "hack" in May 2021 that was widely believed to have been a rug pull.

Former Love Island Australia contestant Vanessa Sierra rug pulls her NFT project

A simple illustration of a blue blob shape wearing a rainbow pastel beanie and beige hoodie with a yellow smiley face on it, smoking a cigarette.SmolBoy #128 (attribution)
After a stint on Season 2 of Love Island Australia, Vanessa Sierra has made a career as a successful OnlyFans performer. In 2021, she also began offering crypto trading tips in a Telegram channel that now has more than 10,000 subscribers, and in March 2022 she launched her first NFT project: "Smol Boyz Land". The project was supposed to involve acquiring metaverse land, and was based around her opinion that "it's clear statistically and exponentially that [metaverse land] prices will trend upwards". What could go wrong?

An investigation by OKHotshot has reported that Sierra rug pulled the NFT project, using project funds to wash trade her own NFTs before cashing out. In total, she withdrew 120 ETH (at the time worth around $316,000; today worth around $151,000). Throughout, Sierra claimed that "absolutely none of the funding has been taken by founders".

In addition to the allegations around her NFT project, OKHotshot identified other shady behavior by Sierra, such as pumping-and-dumping other NFTs she'd purchased, and placing lowball offers in $DAI on big-ticket NFTs, hoping that their owners would mistake them for ETH.

After OKHotshot published the thread, Sierra blocked them on Twitter, and deleted the NFT project's Twitter account and website.

Flare token rug pulls or is exploited for $17 million

Chart showing the price of $FLARE (denominated in USDT) over the previous five days. The price hovered between $18 and $20, until briefly spiking to around $25 before plummeting to $0.000001754.FLARE/USDT (attribution)
Exploits and rug pulls of random tokens on BNB Chain are fairly commonplace, but typically the amount of money lost is fairly minimal. In this case, exploiters or insiders were able to siphon 3.9 billion $FLARE from the Flare project, which they swapped for just under $17 million.

This serves as a good example of how theft amounts shouldn't be naively calculated based on the token price before the theft × the number of tokens stolen. $FLARE was priced at around $18.25 before the attack, and a naive calculation would place the theft amount at $71 billion. However, the lack of liquidity caused the token price to plummet to $0.0000018, and the attacker ultimately ended up with around $17 million.

No JavaScript? That's cool too! Check out the Web 1.0 version of the site to see more entries.