Charity Project Pixel Penguin Defrauds Users’ Trust For Profit

On-chain detective ZachXBT said that a rug pull occurred on Pixel Penguin, a charity project created by Hopeexist1, which claims to raise funds to help him fight cancer.

At present, the social accounts of Hopeexist1 and Pixel Penguin have been deleted, and the contract value of Pixel Penguin is only $117,000 (61,686 ETH).

Previously, artist Andrew Wang retweeted his support and called Hopeexist1 his friend. Andrew Wang later apologized to the public, saying he had done proper due diligence.

“I’ll put my rep on the line to say this is for real amidst all the scams in our space,” he said.

According to Wang, Hopeexist1 used photos of cancer patients to gain the trust of the community and then extracted the money for profit:

“F**k man, she was doing commissions for various people in the space (that looked legit and personalized to win our trust). A lot of us, myself included, believed her, if not for the photos of her cancer, then that she had art to back it up. Cancer is a really tough subject too.”

A “rug pull,” derived from the phrase “pulling the rug out,” is a cryptocurrency fraud in which a developer recruits investors but abandons the project before it is completed, leaving purchasers with a worthless commodity.

Rug pulls are frequent in DeFi efforts that seek to disrupt established financial services such as banking and insurance. Rug pulls have also included NFTs, or non-fungible tokens, which grant digital ownership of paintings and other assets.

Smart contracts, which are agreements regulated by computer software rather than the legal system, are often used in cryptocurrency initiatives. This design may be advantageous since it lowers transaction costs, but it makes it harder to track or recover cash if things go wrong.

Because of this structure, as well as the enthusiasm around new projects that promise high profits and the relative anonymity of the crypto sector, developers may take advantage of investors via rug pull scams.

BlockGPT, a new Web3 project aiming to develop a ChatGPT-style artificial intelligence system on the blockchain, was recently discovered to be a rug-pulling project, as Coincu reported.

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