Investing in crypto has its downsides, and this is no exception for rug pulls and NFT marketplaces. Cryptocurrency scams are rampant, and rug pulls accounted for around 40% of all such cases last year. Moreover, the industry is prone to speculation and wash trading, costing investors significant money. But NFTs are far from being the end of this shady business. A typical Rug Pull is when an NFT project doesn’t follow through on pre-mint promises, leaving the holders with nothing but revenue. There are many types of rug pulls, ranging from slow to full-blown scams. A full-blown rug pull is a scam that is planned from the beginning, while a slow pull leaves the community high and satisfied. Scammers announced the rug pull on Twitter and accused the Magic Eden platform of being “cash grabs.” They also claimed that the platform ignored three red flags: it didn’t carry out an identity check on the scammers, didn’t question the accent of the creators, and didn’t explain the feasibility of the concept. As a result, Magic Eden suspended the service. In addition, it now requires creators to dox privately to prevent scams and scammers. Scams If you’ve recently invested in a Rug Pull, you’ve probably heard of the scams surrounding them. While most scams are legitimate, a few scam artists are notorious for going under, and one of them has stolen over $2.7 million from the Baller Ape Club. While the scam started out like any other project,...
