NFT Project Rug Pulls Investors for $1.3M

On January 11, scammers pulled off one of the largest NFT rug pulls in the history of the Solana Blockchain. Civic, a San Francisco-based crypto firm that first burst onto the scene in 2015 as an open-source identity verification protocol on Etherium, has refashioned itself as an NFT auditing and verification service on competing blockchain network Solana. Civic announced in December that it had "verified" the Big Daddy Ape Club through its Verified program. The company says it designed the program as a free service for creators to verify their real-world identities and build trust within their communities. 

Civic now says it’s working with law enforcement to track down those responsible for the scam. Big Daddy Ape Club was billed as a collection of 2222 ape themed NFTs to be minted on the Solana blockchain and listed on the Solana NFT marketplace. But it turned out to be a classic "rug pull", a type of exit scam that is all too common in crypto in which developers suddenly leave a project and disappear with investors’ money.

Soon after, the Twitter account, Discord server, and website for Big Daddy Ape Club went dark. Solanart acknowledged the rug pull, pointing out that Civic had verified the project.

Mert, a software engineer at Coinbase and a Solana researcher, said that this is the largest NFT rug pull that he has tracked so far. He said that he tracked the scammer’s Solana wallet and that some of the funds have been transferred to accounts on cryptocurrency exchange Binance. Upon filing a report, the exchange told Mert that it has since blocked the accounts and will likewise work with law enforcement to investigate.

Civic says the verification process is designed to share information with the appropriate authorities in the event of a rug pull. It says it is in direct contact with U.S.-based authorities and intends to cooperate fully.