NFT NYC Malicious QR Code Phishing

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NYC NFTs Phishing Website

NFT NYC is an annual event which happens in New York City, United States. There were widespread reports of malicious QR codes at the event. Based on an initial analysis, it seems that one scheme revolved around replacing QR codes on menus with alternative QR codes which directed the user to a malicious website promising a 25% discount if they hooked up their wallet. No malicious QR codes have been recorded on billboards. There was one loss report located of a single NFT being transferred due to this attack.

About NFT NYC

TBD - More background on NFT NYC.

NFT NYC describes itself as "the leading annual non-fungible token event". The 2022 meet-up is the fourth such event to take place. With NFTs hitting boiling point in the media, it's natural to think scammers would turn their sights on the plundering of incredibly fungible apes and other items of a digital nature.

"Sadly, it seems nobody grabbed a photo of what these scam billboards look like. However, a "wallet drainer" is just another way of saying "phishing website"."

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

Panic ensued as reports surfaced of malicious QR codes that were tricking people into having their digital assets stolen. While details remain unclear, at least one NFT holder and event participant lost an NFT from a malicious QR code.

Key Event Timeline - NFT NYC Malicious QR Code Phishing

Date	Event	Description
June 19th, 2022	Malicious Domain Registered	The nycnfts.xyz domain is registered.
June 20th, 2022 12:34:19 PM MDT	Otherdeed #95904 NFT Stolen	The Otherdeed #95904 NFT is transferred from OpenSea user "MattyZ" to an unknown attacker.
June 20th, 2022 12:54:35 PM MDT	Otherdeed #95904 NFT Resold	The Otherdeed #95904 NFT is resold by the attacker to OpenSea user pandooo for 2.660 ETH.
June 21st, 2022 7:01:00 AM MDT	NFTNYC Billboard Takeover	The NFT NYC event is well underway, with reports of a "Times Square Billboard Takeover" which is displaying NFTs on a large billboard in Times square. The main event of NFT NYC is reportedly not until 3 PM.
June 21st, 2022 10:08:00 AM MDT	GammaCounter Posts Warning	A warning is shared to Twitter, with a screenshot from a Discord channel.
June 21st, 2022 7:07:00 PM MDT	Several Reports Of Drained Wallets	Twitter user PRD_ALPHA posts on Twitter about "several reports wallets being drained" and recommends not to "scan billboard QR codes or flyer QR codes".
June 21st, 2022 9:53:00 PM MDT	Peckshield Reports Phishing Site	A Peckshield report is generated on a nycnfts phishing website. This Tweet also includes a reference to an NFT Otherdeed #95904 being transferred earlier, presumably by the attacker. TBD follow the blockchain trail on this.
June 23rd, 2022 12:12:00 PM MDT	Black Alchemy Tweet Report	The Black Alchemy Solutions Group posts on Twitter to warn about reports they are receiving of malicious QR codes "by the hour". They mention both key loggers and wallet draining applications. They include a photo of a QR code which is not malicious.
June 23rd, 2022	MalwareBytes Labs Article	An article by MalwareBytes Labs warns about the presence of "rogue cryptocurrency billboards" that "go phishing for wallets". The article references the Twitter post by GammaCounter. TBD more details.

Total Amount Lost

The only verified reported loss from this incident was an Otherdeed #95904. This NFT had an immediate resale value of 2.660 ETH.

While other sources seemed to suggest that QR codes were more prevalent, there has been no substantiated report of any loss.

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?

PRD Alpha QR Codes Warning

Twitter user PRD Alpha claimed there were several reports of wallets being drained. No details were provided.

If you are in NYC for @NFT_NYC don't scan billboard QR codes or flyer QR codes There are several reports of wallets being drained

Other Twitter Community Warnings

Various reactions were received from the community.

"Don’t tell me people actually got scammed with QR code’s at NFT NYC"

Black Alchemy Fraud Reports

On June 23rd, Black Alchemy reported that they were receiving "cases of this by the hour".

QR Code Warning NFT_NYC.

NFT_NYC, we highly urge you advise your audience.

We are getting cases of this by the hour.

QR Codes are being used to download various types of malware

Drain Wallets

Keystroke Logging (Seed Phrases)

Example Story Shared Later

The following story was shared on June 24th, with no indication whether it was indicative of what was actually happening:

attacker goes to a restaurant near NFT NYC with QR code menus. clones their website, adds a "25% discount for NFT NYC" that requires you sign with wallet to claim, and replaces the QR with their own. goodbye bored ape

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

There do not appear to have been any funds recovered in this case.

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

Ongoing Developments

NFT NYC ran their next event in April 2023, and continues to run annually.

Individual Prevention Policies

There is limited visibility into exactly how this QR code scheme operated, so the advice covers over multiple possibilities.

Smart Contract and Website Analysis

Avoid the use of smart contracts unless necessary. Minimize the level of exposure by removing or withdrawing assets whenever possible. Aim to choose smart contracts which have obtained third party security audits, preferably having been audited by at least three separate reputable firms. Pay attention to the audit reports, which smart contracts are covered, and whether the smart contract has been upgraded or modified since the report. Ensure that any administrative functions with the ability to remove funds from the smart contract are under the authority of a multi-signature wallet which is controlled by at least three separate and reputable entities.

Any time untrusted software is being run is an opportunity for abuse. It is recommended to always interact with cryptocurrency in a fully controlled environment, which is an environment where you have understanding of every piece of software running there. Using a hardware wallet, spare computer with all software wiped, and/or virtual machine with only the needed software greatly reduces your attack surface. Take the time to verify downloaded files come from the correct and expected source and match available hashes if provided. Any time you encounter a new file, always check if it can contain executable code prior to using it.

Never Ever Share Your Seed Phrase

Many websites operate based on requesting users to share seed phrases in order to connect a wallet or debug an initial failure of their wallet to connect. This is always a bad idea to enter your seed phrase into a website.

Private keys can be obtained through seed phrases, mnemonics, private key files, mobile synchronization screens, wallet export features, wallet backups, etc... Never ever send these to anyone else who you do not intend to allow to take all of your money. Attackers will use a wide variety of tactics to convince you like pretending to be your wallet software, pretending they work for the wallet software, or asking you to screen share. Don't fall for them.

Reduction of Risk Through Offline Storage

Store the majority of funds offline. By offline, it means that the private key and/or seed phrase is exclusively held by you and not connected to any networked device. Examples of offline storage include paper wallets (seed phrase or key written down and deleted from all electronic media), hardware wallets, steel wallet devices, etc...

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

Platform Prevention Policies

This case does not appear to have resulted in a loss to any platform. None-the-less, platforms may play an important role in user education.

Never take for granted the limited knowledge of users of your service and their tendency to skip past provided information. It is recommended to design a simple tutorial and quiz for new users which explains the basics of seed phrases, strong password generation, secure two-factor authentication, common fraud schemes, how ponzi schemes work, as well as other risks which are unique to the cryptocurrency space. This tutorial and quiz should ensure their understanding and be a standard part of the sign-up or download process which is difficult or impossible to skip.

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

Regulatory Prevention Policies

The primary reason for any loss (and the panic which happened) was due to a lack of knowledge by event participants in how to properly secure their assets.

Create a standard tutorial and quiz for all new cryptocurrency participants, which is required to be completed once per participant. This tutorial and quiz should cover the basics of proper seed phrase protection, strong password generation, secure two-factor authentication, common fraud schemes, how to detect and guard against phishing attacks, how ponzi schemes work, as well as other risks which are unique to the cryptocurrency space.

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