While NFTs are being heralded as the next big thing in online investing, they are also ripe territory for scammers — users hoping to secure an NFT from Twitch co-founder Justin Kan fell prey to scammers who breached the project and made off with around $150,000.
Sent out through its official Discord channel, the link promised over 3,333 commemorative NFTs designed but went to a link controlled by scammers instead of Fractal and offering nothing in return.
"It's a super f*cked up situation," Kan said in the explanatory video message. "We're still investigating how it happened but we shut everything down for now."
In the video message, Kan promised to reimburse the approximately 370 users who sent money only to have it go to a scam link, which NFT expert Tim Cotten estimated at around $150,000.
Short for non-fungible tokens, NFTs are a way to claim ownership over a piece of online content like art, video or music. Popular ones like the Bored Ape series can sell for millions. NFTs are also popular among investors as they are snapped up and resold within seconds by both bots and real-life investors.
"I am really sorry that this happened," Kan said. "[...] I encourage anybody out there who is in crypto or has a crypto wallet to always be using Burn and always trust your instincts. If something seems fishy, don't jump into it."
While many users thanked Kan for the quick response and steps to reimburse those who lost money, the post also reignited discussion on how the urgency around NFT can be seized upon by hackers.