How Scammers Stole Seth Green’s Bored Ape Yacht Club NFT And Converted It To Cash

During the pandemic, bizarre digital images of cartoon apes called “Boring Apes” have become the latest way to garner crypto credibility and some celebrity prestige.

Bored Monkeys Yacht Club it is one of the most valuable and successful collections of non-fungible crypto tokens (NFTs) to date, with some selling for over $2 million USD. Several of the digital apes ended up in the crypto wallets of celebrities including Jimmy Fallon, Paris Hilton, Steve Aoki, and actor Seth Green.

In May, Green made headlines when he announced that he had lost possession of his prized original BAYC (#8,398 of 10,000 total unique digital assets in the collection), along with three other valuable NFTs: two mutant apes and one Scribble.

All of these popular collections of NFTs exist on the Ethereum blockchain, the second most valuable crypto ecosystem behind Bitcoin and the birthplace of NFTs. Transactions on Ethereum can be done anonymously, but all transactions are also transparent for anyone to see. That was how Green was able to verify that BAYC #8398 had ended up in the wallet of someone who was after the mango. darkwing84which appears to actually be a Sydney-based cinematographer. (tip of hat for PJ Vogt and Crypto Island for doing 99 percent of the work connecting the handle to a real human being).

It’s also how we know that Green seems to eventually have bought the NFT ape he calls “Fred” back for more than what DarkWing84 paid the thief on June 7th.

The Bored Monkey and two Mutant Monkeys now reside in a wallet labeled “Fred_Simian” at OpenSea. Green reportedly has plans to develop a show with some of your NFTs as characters, which may be why he was willing to pay for the stolen ethereal goods.

Much of the focus of Seth Green’s case of the ape has been on the NFT’s own journey through different slots in a distributed public ledger and who controls the keys to those moves. Meanwhile, the flow of fungible tokens that can be more easily exchanged for real fiat money and used in the non-digital realm has been more opaque.

Green has said he was duped by a phishing scam site that was a clone of the Gutter Cat Gang, another moderately successful collection of NFTs.

Now a blockchain researcher @ZachXBT has paved the way of the approximately 106 ETH (valued at $121,000 as of July 11) that passed from DarkWing84’s wallet to the scammer in exchange for the stolen ape, which the thief only held in custody for less than two and a half hours before selling it.

In a Twitter thread, the pseudonymous detective explains how after Green connected his Ethereum wallet to the scam’s phishing site, he apparently clicked something that then authorized the scammer to transfer Green’s most valuable NFTs.

“I am very careful about separate wallets and security, but I still got it,” Green said on Twitter on May 17 after the digital goods were stolen.

Within minutes of selling the stolen Apes and Doodles, the thief began a series of crypto transactions in an attempt to launder the funds. The four stolen NFTs generated more than $400,000 worth of ETH, which was later exchanged for an Ethereum ERC-20 token called renBTC to make it easier to move the proceeds into Bitcoin.

“The scammer then uses a technique called peel chain where he launders large amounts of crypto through small transactions,” ZachXBT explains.

After ten layers of transactions to try to further launder the funds, a large portion is moved back from ETH to Bitcoin and eventually exchanged for $107,000 in stablecoin Tether.

“Funds then sit dormant for 41 days before receiving notification that they are in motion again,” the thread continues. “On June 21, the scammer begins transferring stolen funds to @WhiteBit (a European crypto exchange). I immediately send them a private message, but unfortunately it doesn’t seem to be reviewed internally.”

A centralized exchange like WhiteBit or Coinbase functions as a crypto on/off ramp where digital tokens can be exchanged for dollars, euros, or some other fiat currency and then more easily disappear into circulation.

ZachXBT believes that the perpetrator has scammed and laundered millions of dollars through similar means.

“Although Seth Green is the victim in this example, many other people have lost money to the same scammer. Hopefully at some point they slip.”

If you have advice on incomplete activities on the blockchain, please contact me @ericmack, [email protected] or my colleagues @journodao.