A scam that gained notoriety in the NFT world this week is quite morally nuanced, as the purpose was not to scam an individual but to teach a bot a lesson.
Youtube blogger and NFT trader Hanwe Chang noticed a bot that was mimicking all his actions on the Blur marketplace and decided to take advantage of the situation.
Noticed that someone's bot was copying my bids on Blur, so I decided to trick him...
— Hanwe (@HanweChang) August 5, 2023
Made 800 ETH profit thanksss pic.twitter.com/KlaXKUFUBK
Chang purchased a large number of Azuki NFTs using an anonymous wallet, then placed an inflated 50 ETH (around $90,000) bid on one. The bot then proceeded to offer the same amount on the other NFTs and Chang accepted the overpriced bids.
Selling each NFT using this strategy earned him 800 ETH, or around $1.5 million. Similar Azukis have previously sold for less than 5 ETH, a tenfold difference that immediately gained attention.
The NFT trader received a lot of praise on crypto Twitter after revealing how he deceived the bot, most cheering on the rare victory of man against technology. “elizab.eth”, the bot’s owner wasn’t as supportive. They tweeted at Chang, accusing him of theft and threatening legal action. However, in a follow-up tweet they offered a more peaceful resolution:
"We would like to discuss a bounty with you. We are offering a 10% bounty of any funds stolen from our bot, which are yours to keep if you return the remaining 90%."
If Chang is a criminal, then he is the Robin Hood of NFT marketplaces - through his Twitter account, he often informs followers of scams and sketchy market players.
The NFT market is currently going through a rough patch. According to a DappRadar report, compared with June, trading volume and the number of sales dropped 29% and 23%, respectively.
The market slump has impacted traders and scammers alike. The latter saw their overall revenue decrease to $1.73 million in July, 23.79% less than in June and 89% less than the $16.2 million illicitly earned in February.
To preserve the golden days of digital collectible theft as the market shifts towards low-priced NFTs catering to wider audiences, crypto bandits have been exploring new fraud schemes.
One scam gaining momentum is fraudsters promoting fake NFT releases while posing as legitimate developers, in this way tricking crypto users into accessing bogus websites where “drained smart contracts” siphon all funds and NFTs from their wallets.
This phishing scheme got the attention of the Federal Bureau of Investigation (FBI), which issued a warning alert to crypto crowds last week. According to the U.S. agency, “criminals either gain direct access to NFT developer social media accounts or create almost identical accounts to promote new NFT releases,” gaining users’ trust before encouraging them to connect their wallets to spoofed websites.
