Fractal NFT Discord Hack

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Fractal Homepage

Fractal launched a large-scale NFT collection called "Fractals" in December 2021, featuring 100,000 unique snowflake-themed NFTs. These NFTs belong to one of four factions, have power levels ranging from 23 to 100, and possess various attributes. A scam occurred when a hacker infiltrated Fractal's Discord "#announcements" channel and posted a fake minting link. Users who followed the link and connected their wallets were defrauded of their Solana cryptocurrency, amounting to approximately $150,000. Fractal plans to fully compensate the 373 victims affected by the hack and has obtained the list of Solana wallets that sent funds to the hacker.

This is a global/international case not involving a specific country.

About Fractal.is

"Fractal is a startup project from Twitch co-founder Justin Kan specializing in the buying and selling of NFTs representing in-game assets. It was announced earlier in December and quickly amassed a following of more than 100,000 users through Discord — making it a target for the kind of scammers that have plagued NFT projects since the beginning."

"Introducing the Fractal NFT." "Last December [2021], we launched Fractal NFT collection, the largest and most successful airdrop on Solana."

"100k unique snowflakes floating around the metaverse. Fractals will come with benefits on the Fractal marketplace and within the community. In addition, it is our hope that fractals will give you special powers in your favorite blockchain-based games. We believe “cross-game” assets like these, that are truly yours, is the future of gaming. Together, we can unlock that future.

Fractals belong to 1 of 4 factions: tri, quad, penta or hexa. The faction dictates what shapes the fractal is constructed from and the color it emits. The tri faction is the largest, containing 70,000 fractals. The hexa faction is the smallest, containing only 1,000."

"Each fractal has a power level from 23 to 100. Higher power fractals are more rare, as they are not easy to find in nature because of their instability. You can quickly determine the power level of a fractal by the fractal’s size and complexity."

"Fractals are dynamic clusters of energy and thus may change slightly over time. Fractals have a variety of attributes, some of which are not visible from the fractal’s image. These include faction, power, name, purity, velocity, spin and altitude. Games may choose to utilize these attributes however they wish. Perhaps your player unlocks special powers when you collect 1 of each faction… Or perhaps fractals with ultra-high purity unlock secret doors. Endless possibilities. Game on frens."

"In the Fractal NFT Metagame, Fractal NFT holders are competing for power. By engaging on Fractal through minting, trading, and most importantly, playing in tournaments, you can power up your Fractal NFTs.

Beware, Fractal NFTs will slowly discharge the newly acquired power. The discharged power will be redistributed to other players to earn. The speed of discharge depends on the purity of your snowflake. The higher the purity, the slower the discharge.

Very soon, you will be able to use Fractal Wallet containing the NFT to unlock in-game benefits with our Metagame partner games.

Keep track of your Fractal NFT Metagame progress by comparing the “OG Power” attribute to the “Power” attribute. "

"Buyers hoping to get a limited-edition NFT from Fractal, a new marketplace for game item NFTs, were given an unpleasant and costly surprise on Tuesday morning when it was revealed that a link sent through the project’s official Discord channel was a scam set up to steal crypto."

"The announcements bot on our @fractalwagmi discord was hacked. Do not go to any url and connect your wallet / mint anything."

"an unauthorized user posted a fake minting link in Fractal's "#announcements" channel."

"Users who followed the link and connected their crypto wallets, expecting to receive an NFT, instead found that their holdings of Solana (SOL) cryptocurrency were emptied and transferred to the scammer’s account. An analysis posted on Medium by Tim Cotten, founder of another NFT gaming project, estimated the value of SOL stolen to be around $150,000."

"Justin Kan, co-founder of Twitch for his Fractal NFT project, where 373 users stole their cryptocurrency."

"The hacker made out with ~800 sol (~$150,000) by managing to post a fake mint link in our #announcements channel. With over 100,000 members in our community, it’s quite impressive that the hacker only managed to dupe .3% of our community."

"In a Twitter video, co-founder Justin Kan encouraged Fractal members to "always be using a burner" for their crypto wallets, and to always be on the lookout for scams like this one.

"The startup said in its announcement that it will fully compensate the victims of the hack"

"Fractal is planning to fully compensate these 373 victims. We will need a few days to work it out. Please be patient with us. To the victims: We already have the list of Solana wallets that sent funds to the hacker and so we do not need anything from you at this moment. Do not delete your wallet, as we have no way to verify who the wallet owners are outside of returning funds to the wallets that were drained."

This is a global/international case not involving a specific country.

The background of the exchange platform, service, or individuals involved, as it would have been seen or understood at the time of the events.

Include:

• Known history of when and how the service was started.
• What problems does the company or service claim to solve?
• What marketing materials were used by the firm or business?
• Audits performed, and excerpts that may have been included.
• Business registration documents shown (fake or legitimate).
• How were people recruited to participate?
• Public warnings and announcements prior to the event.

Don't Include:

• Any wording which directly states or implies that the business is/was illegitimate, or that a vulnerability existed.
• Anything that wasn't reasonably knowable at the time of the event.

There could be more than one section here. If the same platform is involved with multiple incidents, then it can be linked to a main article page.

The Reality

This sections is included if a case involved deception or information that was unknown at the time. Examples include:

• When the service was actually started (if different than the "official story").
• Who actually ran a service and their own personal history.
• How the service was structured behind the scenes. (For example, there was no "trading bot".)
• Details of what audits reported and how vulnerabilities were missed during auditing.

What Happened

The specific events of the loss and how it came about. What actually happened to cause the loss and some of the events leading up to it.

Key Event Timeline - Fractal NFT Discord Hack

Date	Event	Description
December 21st, 2021 9:23:00 AM MST	Warning From Justin Kan	Justin Kan Tweets a warning about the breach.
December 21st, 2021 1:50:10 PM MST	Medium Article	The Fractal NFT team publishes an article on Medium about the breach.
December 21st, 2021 2:23:17 PM MST	The Verge Article	The Verge publishes a more detailed article on the Discord breach.
December 21st, 2021 3:59:33 PM MST	Protocol.com Article	Protocol.com publishes an article on the Discord breach.
December 22nd, 2021 3:03:32 AM MST	The Crypto Times Article	The Crypto Times reports on the Discord breach.
December 22nd, 2021 9:09:02 AM MST	Tweak Town Article	Twak Town reports.
December 22nd, 2021 3:47:50 PM MST	NFT Evening Article	NFT Evening reports.
April 8th, 2022 12:05:14 PM MDT	NFTNow Mention	NFTNow mentions the breach in an article on other attacks.
November 17th, 2022 12:35:33 PM MST	Fractal NFT Metagame	The Fractal team publishes an article on Medium about their new Fractal NFT Metagame. "we quickly realized the potential to make this dynamic NFT collection special — to turn it into a game itself".

Technical Details

This section includes specific detailed technical analysis of any security breaches which happened. What specific software vulnerabilities contributed to the problem and how were they exploited?

Total Amount Lost

The total amount lost has been estimated at $150,000 USD.

How much was lost and how was it calculated? If there are conflicting reports, which are accurate and where does the discrepancy lie?

Immediate Reactions

How did the various parties involved (firm, platform, management, and/or affected individual(s)) deal with the events? Were services shut down? Were announcements made? Were groups formed?

Ultimate Outcome

What was the end result? Was any investigation done? Were any individuals prosecuted? Was there a lawsuit? Was any tracing done?

Total Amount Recovered

The total amount recovered is unknown.

What funds were recovered? What funds were reimbursed for those affected users?

Ongoing Developments

What parts of this case are still remaining to be concluded?

Individual Prevention Policies

No specific policies for individual prevention have yet been identified in this case.

For the full list of how to protect your funds as an individual, check our Prevention Policies for Individuals guide.

Platform Prevention Policies

Policies for platforms to take to prevent this situation have not yet been selected in this case.

For the full list of how to protect your funds as a financial service, check our Prevention Policies for Platforms guide.

Regulatory Prevention Policies

No specific regulatory policies have yet been identified in this case.

For the full list of regulatory policies that can prevent loss, check our Prevention Policies for Regulators guide.