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Becoming an influential figure on social media is a coveted aspiration for numerous aspiring collectors of non-fungible tokens (NFTs). Concealed behind profile-picture (PFP) NFTs are individuals who not only exchange "gm" messages but also disseminate the most recent crypto updates and uplift the spirits of the Web3 community during market downturns.
Numerous influencers have garnered a substantial following, ranging from tens of thousands to millions of followers. However, such a substantial audience brings forth the responsibility to act with integrity, recognizing that their tweets hold the potential to influence decisions regarding the purchase or sale of NFTs.
The allure of the role diminishes when an influencer endorses an NFT project that eventually reveals itself to be a fraudulent scheme.
Tuesday morning witnessed the emergence of a Twitter thread by Web3 influencer Andrew Wang, fervently endorsing an NFT collection known as Pixel Penguins. In his post, he passionately shared the story of his friend "Sarah," also known as Hopeexist1 on Twitter, who has valiantly fought against cancer and released the collection as a means to gather funds for her exorbitant medical expenses.
“I'll put my rep on the line to say this is for real amidst all the scams in our space,” said Wang. “I speak with her art teacher often when she's gone for treatment and he says she's the best student he's ever had, that her talent is too precious, that she must survive.”
In Wang's post, it was revealed that the cost to mint each NFT in the pixelated art collection was $13. Out of the profits generated, 20% was dedicated to charitable donations, while the remainder was intended to cover Sarah's treatment expenses. It's worth noting that this collection was not a recent release, as it was initially launched in February. Interestingly, back in April, a Twitter user named LeviNotAckerman had already shared a similar narrative surrounding the Pixel Penguins collection.
Wang's tweet quickly gained momentum on Twitter, inspiring numerous users to rally behind his strong belief and start minting Pixel Penguins to support the cause. In a matter of hours since the thread was posted, all Pixel Penguins were sold out, causing a surge in popularity on the secondary marketplace OpenSea. The floor price of Pixel Penguins rose to 0.07 ETH, approximately $130, by Tuesday evening.
Nevertheless, as the day drew to a close, Twitter users started harboring doubts about the authenticity of the project. Gradually, they stumbled upon questionable tweets from Sarah's account that dated back to 2021, as well as resurfaced allegations of stolen artwork. A few individuals went as far as speculating that her purported cancer diagnosis was fabricated as a means to solicit donations.
However, the repercussions had already taken effect. In no time, the Hopeexist1 Twitter account was wiped out, along with any remnants of its existence scattered throughout the internet.
As speculation grew, ZachXBT, a pseudonymous crypto investigator, disclosed Ethereum (ETH) addresses associated with the Pixel Penguin NFT collection. These addresses revealed that the contract had accumulated approximately 61.6 ETH, equivalent to roughly $117,000. Just two hours later, ZachXBT revealed that 63.5 ETH, nearly $119,000, had been divided among two newly created wallet addresses. While deceived users hurried to find ways to recover their losses, the scammers cunningly deposited the funds into a wallet on the cryptocurrency exchange OKX, further complicating the tracing of their financial transactions.
“I wanted to help a struggling artist that was battling cancer,” shared Twitter user DachshundWizard, who wrote that he had been taken advantage of. “I felt like I could use the momentum from today of giving hundreds of thousands to people for nothing for good – it worked, but it turned into a rug and I was taken advantage big time.”
At the time of this publication, the minimum price for items in the collection has dropped to 0.004 ETH, equivalent to approximately $7. However, the collection has generated a trading volume of 216 ETH, approximately valued at $403,000, according to OpenSea.
Blame, shame and anger
Several NFT collectors, who were victims of what seemed to be a rug pull, started channeling their anger towards individuals they believed had misled them, particularly Andrew Wang, causing a wave of discontent.
Following the collapse of the Hopeexist1 story, Wang took to social media to share an additional thread in which he condemned the collection and expressed his sincere apologies for his involvement in its promotion.
“I didn't have the proper wisdom to navigate something like this,” wrote Wang. “Hearing a story as heartbreaking as hers, backed up with art that she was making, made it hard for me to be objective.”
He posted on Twitter, mentioning that he had conversed with an individual who purported to be her teacher prior to purchasing her artwork, lending an air of authenticity.
“I would say that I would be better in the future, but to be honest, I'm not sure that I would be any different,” Wang wrote. “I personally feel hurt and cheated … and I feel more terrible that the community bought into Pixel Penguins following me being one of the people who shared her story. I'm deeply sorry about that.”
The apology fell short for certain individuals, taking into account the influence of his endorsement among his extensive following. Furthermore, another user highlighted that he had previously shared a series of tweets promoting her artwork in December 2022.
“How did you verify her story?” asked ZachXBT. “Ngl most people probably minted bc of your thread.”
“I bought one of her pieces, trusting you had verified this,” said user Rocketgirl.
Wang politely refused to participate in an interview for this story.
The role of influencers in Web3
For years, the crypto community has flocked to social media platforms such as Twitter and Discord to seek camaraderie and stay ahead of market trends. With the rise of PFP (Profile Picture) projects, NFT enthusiasts have embraced these platforms as a means to showcase their digital assets and cultivate a dedicated audience around their online personas. Consequently, an abundance of influential figures with substantial followings have emerged, enthusiastically promoting various NFT collections, often without sufficient regulation or oversight.
Investing is inherently risky, particularly in the crypto industry, and the stakes are even higher when dealing with NFTs that possess artistic or emotional value. Differentiating between legitimate projects and scams can be challenging, which is why influencers often position themselves as reliable authorities to help navigate this complex landscape.
However, the series of NFT scams serves as a poignant reminder that blindly relying on a single source without conducting thorough research, which is a fundamental principle in the cryptocurrency realm, is an imprudent pursuit.
On Tuesday night, a substantial number of anxious users flocked to a Twitter Space, eagerly seeking insights from a select group of influencers, including Wang, regarding the Pixel Penguins scam.
During the conversation centered around the deceptive tactics employed to support the project, Fetty, a Twitter user, raised awareness regarding the broader consequences of influencers endorsing collections that occasionally result in rug pulls.
“I've kind of heard people iterate the point that it's really hard to do due diligence, or like, we can't blame [influencers] for not realizing this was a scam,” said Fetty. “If you're going to be in a position of influence like this… or even try and support projects, you have to take responsibility.”
Wang promptly clarified that his intention was never to offer investment advice or encourage individuals to mint NFTs from the collection.
“Please don't ever take what I say as trading advice,” said Wang. “If I hinted at that today with my tweets, I don't think I did, but because that's where the space is … I'm sorry.”
While certain individuals came to Wang's defense, others noted that this is a common tactic employed by influencers to shift blame and avoid taking responsibility.
In April, Nicole Benham, a former journalist and influential figure in the Web3 community, enthusiastically endorsed the Blocky Doge NFT collection, which was created by BillyM2K, the founder of Dogecoin. While promoting the collection on Twitter spaces, she decided to sell off 220 out of the 250 Blocky Doge NFTs she possessed. Unfortunately, within a span of just 24 hours, the collection's average price plummeted by half, as indicated by data from OpenSea.
Following the backlash, Benham took to Twitter to address the situation, stating that she was "doing my best to rectify the situation," However, her apology was met with skepticism by some, questioning its authenticity.
In February, the NFT collection Friendsies caused alarm when it abruptly deleted its Twitter account, leading to suspicions of a potential scam. During the investigation into the collection, Twitter users directed their attention towards Farokh, the host of Web3 show Rug Radio, and artist Jen Stark, both of whom have substantial followings, for their previous endorsements of the project.
Similar to various other digital subcultures, online NFT communities have thrived, giving rise to prominent figures within the field. However, it often appears that the NFT space operates with a sense of lawlessness, with influencers facing minimal repercussions for their actions, despite the significant impact they have on a large number of individuals.
In the end, it is the responsibility of every individual collector to thoroughly assess a project before committing their funds. Nevertheless, these familiar anecdotes serve as a poignant reminder that even if you believe you have a deep understanding of an influencer, you seldom have insight into their true motivations and the extent of their project evaluation.
