YouTuber Exposes Alleged NFT Scam Worth $20 Million

US-based YouTuber and Internet personality Coffeezilla, aka Stephen Findeisen, who investigates online scams, has uncovered an alleged conspiracy by non-fungible token (NFT) scammers that could have potentially earned $20 million (roughly Rs. 150 crore). In a video published recently, the YouTuber with close to 9,50,000 subscribers, described how scammers attempted to use the Squiggles NFT project to defraud unsuspecting investors. The project received a lot of publicity and it is alleged that it attracted a number of shadow crypto wallets who were engaged in pumping up volumes. However, the project has since been pulled from the NFT marketplace OpenSea.

While it was listed on OpenSea, Coffeezilla claimed that it discovered a series of counterfeit wallets created by a person who bought Squiggles, which translated into counterfeit volumes worth millions of dollars. The purchased squiggles were then flipped over to OpenSea for less money.

Citing an example of his findings, the YouTuber revealed that a single account spent ETH 800 (worth $2.34 million or Rs. 17.5 crore) spread over two transactions, resulting in the creation of hundreds of new wallets. Although the reasoning behind buying Squiggles and selling them at a loss is unclear, Coffeezilla claims it was intended to give the illusion of overwhelming interest for people to buy and then abandon the project.

The project started raising doubts just before it was launched when hours before the drop, an anonymous user published a 60-page report accusing Squiggles' founders of being paid puppets. At the same time, the real people behind the project are said to belong to a group of NFT mass scammers operating under the name “NFT Factory LA”. The scammers allegedly promoted Squiggles by giving away fake gifts to close friends. The team of scammers also rented an actual office and hired actual employees to cover all the loose ends.

According to Coffeezilla, the project's founders are taking advantage of verified Twitter accounts to manipulate the social media platform to defame the person behind the dossier. Interestingly, users who inquired more about the dossier were immediately banned on the Squiggles Discord channel.

As per a report by Finbold, the suspects have been identified as Gavin, Gabe, Ali, and a person who is thought to be a high school student. Notably, one of the accused was acting as a puppet for the criminals released a video denying the allegations.