NFTs are an extremely risky investment strategy.  

Fractal, an NFT marketplace started by co-founder Justin Kan, was hacked December 22 and a scammer managed to trick over 300 members of the platform’s Discord channel into coughing up around $150,000 of the cryptocurrency Solena.

The hacker used a bot on the Fractal Discord channel’s announcements section to plug a fake link that switched the “l” in Fractal with an “i”.

Changes like that are a common warning sign that a hyperlink isn’t legit, but it is an easy difference to miss, especially if people are hurrying to click a link because of trader’s FOMO.

The hyperlink led to a site where they paid with Solena for “freshly-minted” NFTs, but received nothing.

Fractal’s team released a statement December 22, apologized for the incident, and promising to pay back the scam victims.

One part of the statement in particular drives home how deeply sketchy the NFT market is:

“If something doesn’t feel right in crypto, please don’t proceed, even if at first it looks legitimate. We must use our best judgement as there’s no “undo button” in crypto. Fractal will not charge you for any NFT airdrops.”

After its initial statement, Fractal tweeted that it paid back the stolen Solero to 335 scammed people.

Fractal also warned its community that if a similar scam happens in the future, the company is unlikely to be able to reimburse people.

But if you stay vigilant and aware of what scams are, and how to recognize them, you’ll surely keep yourself safe when investing in NFTs.

If you are interested in learning more about NFT License Agreements or require legal assistance in connection with preparing your customized NFT license agreement, feel free to reach out to us and our expert attorneys will contact you in no time!

Note that the information mentioned in this article is not a substitute for obtaining legal advice from an attorney. Each situation is unique, and you should not act or rely on any information contained herein without seeking the advice and the knowledge of an experienced attorney.

Legally Yours,