Gaming venture capital firm Animoca Brands has promised to repay users in 265 ETH worth about 1.1 million, stolen in a single transaction in a fake NFT drop Discord scam. The fraud occurred in the early hours of November 19 on the Phantom Galaxies Discord server for nearly three hours.
On November 19, a group of unknown hackers took over the official Phantom Galaxies Discord server which has 94,000 members by utilizing a malware bot that compromised the two-factor authentication for the Admin account of the Discord server of Phantom Galaxies.
After taking over the Discord server, the hackers banned all staff accounts as well as all accounts of advisors and community moderators and then made a fake announcement that the game was launching a surprise non-fungible token (NFT) minting event.
The users were then directed to a fraudulent website that purported to be a Phantom Galaxies NFT minting platform. Upon signing up they were charged with a 0.1 ETH minting fee that did not actually mint anything but simply transferred the funds to the scammers’ Ethereum wallet address. In total, the hackers stole about 265 ETH worth about US$1.1 million from Discord users via 1,571 fake minting transactions over the course of about three hours.
Shortly after the Discord hack occurred, Animoca Brands and Blowfish Studios that developed the online game "Phantom Galaxies" vowed to cover the losses of all victims of this scam.
This is not the first fake NFT drop hacking incident. In fact, even popular NFT artist Beeple suffered a similar attack on November 11 where users thought they were signing up for a very affordable NFT drop that coincided with his second Christie’s auction.
Apparently, the perpetrator impersonated one of the channel admins and the Beeple Announcements Bot to promote a fake NFT drop from Beeple on Nifty Gateway. Since then, the popular NFT artist has removed links to the Discord from his Twitter profile, and other links to the server no longer appear to work.
Earlier last month, cyber security company RiskIQ uncovered 27 unique malware types hosted on Discord's CDN servers and found that Discord is becoming an increasingly popular platform for cybercriminals.