In 2025, the Blockchain Community exposed a suspected $20 million NFT issuance fraud case.

Latest developments in 2025

In a significant development following the Squiggles NFT scandal, a blockchain forensics company has implemented an advanced detection system specifically designed to identify shadow wallet networks. These systems are now capable of marking suspicious transaction patterns across multiple platforms before scams reach a critical scale.

Data from blockchain analytics companies shows significant improvements in fraud detection:

The NFT Factory organization exposed by Coffeezilla has been permanently blacklisted on all major platforms, and their digital fingerprints are now tracked by specialized algorithms. Platform security teams share intelligence through a decentralized alert system to jointly combat organized fraud groups.

Regulators have established standardized verification protocols for high-value NFT projects, requiring multi-stage identity verification and source of funds declarations before projects exceeding specific thresholds are launched.

These protective measures represent a significant evolution of blockchain security infrastructure, demonstrating how the ecosystem adapts and improves after high-profile scam attempts like Squiggles.

Blockchain Community dismantles an alleged $20 million NFT airdrop scam

Abstract

Popular YouTuber Coffeezilla has uncovered a $20 million NFT airdrop scam. The YouTube The influencer revealed this fraud in a recent YouTube video.

They plan to use an NFT project called Squiggles to hype it up. However, just hours before the release of Squiggles, a file was deleted, and the entire team behind the project was accused. According to the file, the team behind Squiggles is a group of individuals responsible for multiple scams, and the Squiggles project is actually just a puppet. According to Coffeezilla’s revelation, these scammers are called NFT factories. Since the discovery, OpenSea has delisted the NFT airdrop scam project. Shadow wallets used to promote false narratives have also been exposed and delisted by OpenSea.

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The Story Behind Squiggles

On February 10, the new NFT project Squiggles started minting. According to the developers, the project is a collection of 10,000 NFTs. Before the series was launched, there was a lot of hype around the project, with the team spending a significant amount of money on promotion, including electronic billboards and hiring influencers. Squiggles’ Twitter account currently has about 223,000 followers, while just before the exposure of its fraudulent activities, it had reached 230,000 followers.

However, just a few hours before the project launch, a criminal video circulated, revealing Arsalan, the true identity behind the scam, which ultimately led to its failure. According to Coffeezilla, someone saw Arsalan in the same car as another suspected NFT scammer, Gavin. Gavin Mayo is a figure known for his NFT rug pulls and has been blacklisted by the NFT community.

Sinful Souls Homepage

After connecting a series of related events and further investigations, Coffeezilla
produced a complete video for the project’s activities on Opensea. Carpet Pull Scam Sufficient evidence has been provided. These investigations include monitoring Etherscan accounts involved in the initial stages of the project.

Less than 30 minutes after the project launched, Squiggles worth approximately $7 million had been sold. Upon further investigation, it was found that a shadow wallet created by one account spent about 500 ETH on the project. Another account was discovered to have purchased 800 ETH using a shadow wallet. Both accounts bought Squiggles and tried to sell the NFTs at a lower price on OpenSea. According to Coffeezilla, this behavior was to create a hype effect for Squiggles and to speculate. Selling NFT artworks at a lower price on OpenSea is meant to create an illusion that there is high demand and good sales for this series of NFTs. However, before they could carry out their scam, OpenSea delisted the Squiggles series along with the shadow wallets.

Squiggles is still fighting back.

Given the solid evidence, people thought the team would cancel the project. However, a few hours after the project launched, Arsalan stated in an Instagram post:

“I just discovered some crazy remarks about me and some strange accusations, not knowing what basis they have or how I got entangled in this. Physically, financially, or mentally, I would never harm anyone; I am not that kind of person; my moral values are very upright.”

To prove that his actions were not illegal the night before the project’s launch, Arsalan further explained:

“These people are trying to distort the facts and incite fear. My friends and I were at the club, simply because my friends have a bad reputation in this field. Now they are trying to link me with them; guys, that’s not the case. Please do not jump to conclusions.”

Despite everything failing, Arsalan is still holding meetings with Squiggles holders and whitelist members. The team behind the project is also trying to launch a social media campaign with the #freesquiggles tag to get Opensea to relist the project. The project is currently live on Looksrare, and over 2,700 pieces from the collection are for sale. They announced in their press release on Twitter that they will reduce the collection to 5,000 pieces.

Twitter Press\
Release

The team behind Squiggles has been accused of other frauds.

The more than 60-page document released just hours before the project launch has put Squiggles in hot water. The document claims that Arsalan is merely the nominal head of the NFT rug pull scheme, while the real mastermind is Squiggles. According to the documents, there is a team of NFT scammers behind the project, and this group of fraudsters is also responsible for other NFT rug pull schemes.

In Coffeezilla’s video, the identities of three individuals (names unspecified) are the teams behind League of Sacred Devils, League of Divine Beings, Vault of Gems, Sinful Souls, Dirty Dogs, Lucky Buddhas, Uncovered, Faceless, and others. According to him, these individuals enhance the creation of NFT scams by mass-producing NFT projects that appear to be of high quality but are merely facades. They implement the scam by being the frontmen for each NFT project under different guises. However, the mastermind behind all these actions is the same person.

Two scam members Gavin Mayo and Travis Skiver admitted in a video that they were the masterminds behind Sinful Souls. However, the manipulator behind Faceless, Travis Skiver, denied ever being behind Sinful Souls. Faceless has caused a sensation on YouTube. NFT Inspector It is believed that Faceless stole a collection of digital artworks, thereby cracking down on this criminal activity.

The fraudsters discussed in a series of leaked documents who would become the leader of the new project. One message indicates that gang member Gabe “is clearly the captain”; however, on the Faceless website, Travis is referred to as the “captain.” Reports suggest that Squiggles sold about 2,700 fake NFT Sinful Souls before going offline, earning nearly $500,000. The investigation uncovered how the organization sought to organize itself. For example, a Sinful Souls exhibition was held at a location in Los Angeles, claiming its legitimacy, which led many to become victims. Gavin stated that the organization even developed to the point of opening a physical office, where one of the leaders said, “this way the team won’t be loose.”

The scammers managed to earn about $20 million from the NFT airdrop scam Squiggles before being exposed. Fortunately, their actions were revealed, preventing thousands of people from becoming victims of their gimmick.