This month saw an explosive scandal as a high-profile Web3 game project was exposed for an alleged $1.6 million exit scam conducted with the help of actors and pro-giveaway accounts. The company, EON.Game, aimed to create a Web3 “Power to the Pixel” platform for game developers. The project raised $1.6 million from white-listing investors back in March, but allegedly performed an exit scam shortly after.
According to reports, EON partnered with a NEAR Protocol-based game studio, 3A Games, and its $1.6 million raised was meant to be used as Seed Funding to launch the NEAR-powered Web3 game platform. However, instead of using the capital for product development, the team behind EON started a token distribution event that involved inflated price and fake transactions to manipulate the market and give the impression of volume and investor confidence.
The exit scam was further made efficient with the help of hired actors and pro-giveaway accounts. Furthermore, the company also allegedly traded with whales to manage the speculative buying pressure and sell back its own tokens. Shortly afterward, the team behind EON simply disappeared, leaving investors out of any of their funds or tokens.
The entire case exponentially shocked and agitated investors in the Web3 space and once again brought up the necessity of due diligence and risk management when engaging with any project. Projects must be well scrutinized and managed to safeguard investments out there, while more essential measures such as independent audits should be introduced to ensure trust and accountability.