On Friday, Lacoste closed the social network of the NFT UNDW3 project and the community reacted by accusing the company of scam. Furthermore, a rugpull of 1,000 ETH is assumed. 

The NFT project of Lacoste and the accusations of scam

Lacoste has launched its project based on NFT in 2022.

The market of NFT experienced a real boom in 2021, reaching its peak levels in January 2022. Since then, it has started to implode.

Taking as a reference the then main marketplace, OpenSea, the monthly trades went from 5 billion in January 2022 to 300 million in December of the same year. Subsequently, in 2023 the monthly volumes dropped even below 100 million. 

So the Lacoste NFT project was launched in the middle of a bear-market, that is, at a really unfavorable time for this market. 

In June of last year they tried to relaunch it, but evidently without success.

And so at the beginning of August, they announced the end of the UNDW3 NFT collections, and last week they closed all social channels. 

The UNDW3 collection

UNDW3 is the first collection of NFT by Lacoste.

On OpenSea, there appear to be more than 11,000 NFTs from both the UNDW3 Card collection, launched in June 2022, and the UNDW3: The Emerge collection launched last year.

The trading volumes on OpenSea for the first collection have plummeted from 2,300 ETH weekly at launch to the current 0.03 ETH, while those for the second have dropped from 22 to 0.04 ETH. 

Moreover, after the initial boom, which lasted only a few months in both cases, there was a continuous decline that makes the colossal loss of market interest in these products evident. 

The company promised holders exclusive access to the brand’s events, but in the end, the project was instead closed.

It is not precisely known how much the company has earned from the sale of these NFTs, but considering that there are two collections of 11,000 NFTs each, and with a total trading volume on OpenSea exceeding 4,000 ETH, the total revenue should not have been very low.  

The accusations of scam against the NFT project of Lacoste

The company had also promised at some point to be working on a new use case for these NFTs related to creation and gaming, thus trying to reassure the fans. 

They declared that the project was actually not finished, but was evolving into a broader initiative aimed at offering a more inclusive and accessible experience for all enthusiasts of the brand.

And instead, in fact, it has been closed, for now. 

Even the official website undw3.lacoste.com now appears to be offline.

At this point, some holders of those NFTs have started to accuse the company of fraud. 

1/3 I hope someone with the expertise will investigate the Soft Rug by @Lacoste with @undw3_lacoste. They reportedly siphoned around 1000 ETH from the crypto market with their 2022 mint, delivering only a minimal product while promising much more. pic.twitter.com/7R9Jk0EAnW

— Le crêpiste (@LeCrepiste) August 29, 2024

The hypothesis is that with this initiative they collected about 1,000 ETH in 2022, and then, once collected, they simply lost interest in the project. 

They are in fact accused of having rugpulled 1,000 Ethereum (ETH) with a sort of soft rug. 

The hypothesis of fraud

For now, there does not seem to be any criminal complaint against the company. 

Furthermore, even in the case where the NFTs they placed on the market have lost all their value, or almost, they might also not be considered guilty of having committed any crime. 

However, there are those who believe that this behavior should be considered fraudulent. 

On one side, there is a company that sells a product whose market value is not necessarily destined to either increase or be preserved over time. On the other, there are people who buy it hoping it will gain value over time, and who then simply realize they have bet on the wrong horse. 

It should be remembered that if Lacoste had promised to increase the market value of those NFTs over time, it would have effectively sold an unregistered security, so it most likely did not do so. Therefore, it may not have any legal obligation in this regard. 

The investigations

As of today, it does not appear that there is any authority investigating this matter. 

This does not necessarily mean that no authority has set its sights on it, but only that for now it does not seem that the company is at risk of anything. 

However, the community is investigating, which nevertheless has limited means in this regard. In fact, it can only use public information and cannot, for example, compel the company to disclose precise and complete data. 

What emerges, however, is that it is unlikely that the company did not know that the NFTs it sold, probably collecting at least 1,000 ETH, could have depreciated over time, but despite this, it continued to sell and promote them as long as it was convenient. Later, it got tired of doing so and simply stopped, not caring about the losses accumulated by the owners of those NFTs. 

For now, it cannot be stated that there is anything illegal in all this, but it can certainly be stated that those who believed that those NFTs would appreciate over time were greatly mistaken. At this point, even those who believed they could be useful for something were greatly mistaken, although it is not yet entirely certain that the UNDW3 project is definitively over. 

By analyzing the data from the REKT database, a recent study by the company “Smart Betting Guide” has found that in the past year, crypto scams in the gaming and metaverse sectors have reached a record amount of 43.7 million dollars.

The alarm is raised for users of cryptographic spaces, who must increasingly face scam attempts such as phishing, fake smart contracts, exploits, and much more.

However, despite the phenomenon appearing to be on the rise, in 2023 the total number of hacks took away from the crypto market a lower value of assets compared to 2022.

This data marks an important trend reversal, with the exception of the category of cross-chain bridges that amplify the technical vulnerabilities of some operations that occur on blockchains.

All the details below.

Gaming and metaverse: thefts and crypto scams worth 43.7 million dollars in 2023

The company “Smart Bettin Guide” in a recent study, conducted by analyzing the data present on the REKT database, highlighted alarming numbers regarding crypto scams operating in the gaming and metaverse sectors.

In 2023, cybercriminals have stolen various decentralized protocols belonging to these market niches for a total value of approximately 43.7 million dollars.

The figure itself represents just 2.5% of all the money lost by users in the crypto world in the past year due to hacks and exploits of various kinds, amounting to 1.64 billion dollars, but it highlights the advancement of increasingly sophisticated fraudulent practices by malicious actors.

Gaming and metaverse represent the sixth most targeted category in 2023, after cross-chain bridges, CeFi platforms, lending protocols on Polygon, Binance’s decentralized network, and DEX on Ethereum.

Especially in the field of cryptographic games and virtual worlds, traps for less experienced users are becoming increasingly clever, sometimes accompanied by AI technology, making it difficult to distinguish them from what is truly legit.

Sometimes scammers try to establish a relationship with the victim, with the intention of creating a “fake friendship” and lowering defensive barriers. Once the goal is reached, scammers use various means to extract valuable data and money from users’ pockets.

Going into specifics, the vulnerabilities reported by REKT in this context range from theft attempts through phishing, to fake virtual exchanges within the metaverse, NFT scams, up to the use of malicious smart contracts.

Companies like GameStop, Microsoft, and Best Buy are concerned about the increasingly frequent theft of digital assets within gaming platforms because they primarily offer the possibility to pay for games in cryptocurrencies and could be the next target of hackers.

The gaming/metaverse projects most affected in 2023 according to REKT data are Stake Wallet, MetaPoint, Ocean Venture, Tales of Elleria, Syncspace Aury, Doglands, and Mars Meta Space.

Computer security experts suggest keeping a close eye during this time of year, which historically proves to be one of the most lucrative for hackers in the crypto world.

Overall, the probability of being hit by a cryptographic scam is higher in the first half of the year than in the second half, excluding December.

Always check the origin and authenticity of the links we find on the internet, always double check with the verified channels of the project in question, use reporting tools for malicious smart contracts like WalletGuard and never trust anyone when money ethics are involved.

These small precautions could save your wallet.

Here is what igmas Pekarskas, CEO of Smart Betting Guide, reported regarding the proliferation of crypto scams in gaming and metaverse contexts:

“Some platforms, including those in the metaverse and gaming sphere, are more susceptible to cybercrime than others. When making transactions on one of these platforms, make sure to do your research and due diligence. Be wary of prices that seem ‘too good to be true’ or of unverified items for sale, especially if you are purchasing a highly limited or sought-after gaming item, as scammers will try to exploit your interest.”

Hacks and exploits decrease overall in 2023 but incidents on bridges increase

Beyond the frightening numbers in the gaming/metaverse category, in 2023 the trend of crypto scams and hacks in web3 in general has slowed down compared to 2022 when there was a real bloodbath for cryptographic protocols.

According to data from DeFiLlama, in the past year total exploits involved assets worth over 1.4 billion dollars, with a large portion in the months of March, July, September, and November.

The most attacked projects were Euler Finance, Mixing Network, Poloniex, and Atomic Wallet.

In 2022, the total amount of crypto stolen by hackers reached the staggering figure of 3.2 billion dollars, which is 41.6% of all thefts on blockchain ever recorded.

March, October, and November have been record months for cybercriminals, targeting infrastructures such as the Ronin network, Binance Bridge, and the FTX exchange.

Anyway in 2023 there was a category that stood out along with gaming platforms and metaverse for the large amount of scams and thefts.

We are talking about cross-chain bridges, the absolute favorite target of hackers who exploit the still immature interoperability technology to obtain large illicit gains.

Since their inception, bridges have lost about 2.83 billion dollars with cases like Ronin, BSC TokenHub, Wormhole, Multichain, Nomad, Horizon, Heco, and Orbit among the most profitable hits.

The growing need for decentralized finance to move assets quickly and economically across multiple blockchains is pushing more and more bridges to seek solutions that are still untested by the community, with a high risk of technical vulnerabilities in the code.

As highlighted by a recent study by Chainalysis, in the last two years these protocols have been of great help to North Korean hackers who have laundered over 1 billion dollars from other illicit transactions carried out on the network.

The wish for the sector at this moment is that the new emerging interoperability solutions like LayerZero and Chainlink CCIP can bridge this gap, making it simple, but at the same time also secure to transfer assets in multichain mode without the risk of encountering crypto scams.