- On January 11, scammers carried out one of the biggest NFT rug pulls in the history of cryptocurrency on the Solana blockchain.
- The con artists got away with 9,136 SOL in monies paid by would-be collectors to mint Big Daddy Ape Club NFTs, except there were none.
- Despite the fact that the NFT drop had been confirmed by decentralized identity verification business Civic, the persons behind the Big Daddy Ape Club were able to flee with the assets.
A San Francisco-based crypto firm, Civic, that the first burst onto the scene in 2015 as an open-source identity verification protocol on Ethereum, has refashioned itself as an NFT auditing and verification service on competing blockchain network Solana. In late December, Civic announced that it had verified the Big Daddy Ape Club through its Verified by Civic Pass program. The organization said that it had designed the initiative as a free service for creators to verify and authorize their real-world identities and create trust among their communities.
The Big Daddy Ape Club, on the other hand, took advantage of that trust. Civic now says it’s collaborating with law enforcement to find the perpetrators of the scam. Civic CEO Chris Hart sent out a tweet saying that they are aware of the reported rug pull at Big Daddy Ape Club and that there are victims. They take this attack on the NFT community very seriously, and they are doing everything they can to help, on the day of the mint.
The Incident Was An Exit Scam
Big Daddy Ape Club was advertised as a set of 2222 ape-themed NFTs that would be minted on the Solana blockchain and placed on the Solanart NFT marketplace. But it came out to be a typical rug pull, a form of exit scam that is all too common in the crypto world, in which engineers abandon a project and disappear with investors’ funds. Faith Orr, a digital artist and NFT blogger who goes by the handle ToasterFires on Twitter, documented the scam on her Substack, saying that the only thing he keeps hearing from Big Daddy Ape Club victims is that they locked the Discord a few hours before mint. Orr further mentioned that scam victims reported not receiving their NFTs after submitting SOL.
Orr remarked that this is a really ruthless act on their side. Most rugs owe their victims the simple courtesy of leaving them with NFTs, even if they never make it onto secondary markets. Big Daddy Ape Club’s Twitter account, Discord server, and website all went offline shortly after. Solanart recognized the rug pull, noting that the initiative had been verified by Civic.
Civic strives for the highest levels of accuracy, but no verification process is 100 percent effective, according to Hart. They said that they do not support or undertake due diligence on initiatives in this program beyond their identity verification services, Hart explained. While this is accurate, potential investors could be forgiven for mistaking a verification for an endorsement, and many did, as seen by the hundreds of responses to Hart’s initial tweet.
Control of the project’s Twitter account, control of the project’s domain, and identity verification of the project founders by ID document collection are all part of the Verified by Civic Pass initiative. In addition to a 2D photo identification, the verification procedure includes a 3D face scan of the person doing the verification. However, it appears that being fully doxed was insufficient to prevent the Big Daddy Ape Club developers from defrauding collectors.
Community Doubts!
Some Twitter users who were following the story questioned why auditors were needed. Why have they been entrusted with deciding what is excellent and bad in terms of projects? Kylienft, an NFT collector, sent out a tweet. Also, are the criteria they’re employing to assess projects even valid?
Civic, back in November, revealed the release of Ignite Pass, a free variant of its Civic Pass, which was designed to get rid of this problem. Civic says that the Ignite Pass requires NFT buyers to prove their liveness and offers a paid upgrade choice for high-value auctions.