Despite billions of dollars in venture capital funding, many web3 crypto platforms remain inhospitable to newcomers. For example, Justin Kan’s NFT platform Fractal experienced a security breach today when a fraudster hacked the startup’s Discord announcement bot, which sent out a bogus link to the network’s more than 100,000 users, asking them to pay up for a new NFT.
The letter offered customers access to 3,333 commemorative NFTs to commemorate the platform’s success, but the link was forged with a fractal.is URL that substituted me for an “l,” redirecting them to a minting site where their money was seized and they received nothing in return.
Overall, it appears that the con artist got off with around $150,000. The attack occurred before the startup’s platform, which was set to debut this week, was even released. “If you lost your Sol – we will repay you,” the business, which funded by Kan’s GOAT Capital fund, has already promised to pay back consumers. We’ll keep you updated as more information becomes available.”
These hacks are not particularly unique; a Solana-based project called the Monkey Kingdom had been hacked just hours before for more than $1.3 million in cryptocurrencies. Both assaults on Discord indicate that the chat platform still has some work to do when it comes to user authentication.
Fractal revealed 373 people defrauded in a Medium post-Tuesday afternoon but said they will be completely paid by the site in the coming days. Grape Protocol, a Solana-based tools platform, reported that one of its administrators had hijacked and that this information was likely utilized to exploit both Fractal and the Monkey Kingdom today.
Fractal seems to be aware that an assault like this, which has previously afflicted a number of other NFT-centric Discord projects, was feasible, if not likely. Fractal set established an “anti-scam” channel in its Discord on Friday for customers to report bad actors, with one team member stating that Fractal “would NEVER ask you to pay cash to any address, and there’s NO google form to fill out,” and that users should “double-check the spelling of any URLs you see.”
While Fractal’s team appeared to be trying to guide their users in the right direction, the larger issue is that the NFT market’s underlying incentive structure discourages users from engaging skeptically because drops sell out so quickly and there is a culture of seizing every opportunity, which can be dangerous for inexperienced crypto buyers.
