NFT Developer, Twitch Streamer Steals Millions in User Funds to Gamble

Posted on: January 4, 2023, 06:54h. 

Last updated on: January 4, 2023, 01:57h.

Erik Gibbs Read More
Expertise: Asia Pacific Gaming, Gaming Business, Global Gaming.

A Twitch streamer may have cost hundreds of people millions of dollars. DNP3, whose real identity isn’t known, used investment money from various NFT (non-fungible token) projects he founded to gamble, leaving the backers – and himself – broke.

Goobers NFTs
The images of Goobers NFTs, created by Twitch streamer DNP3. He has admitted that he stole investor funds from his cryptocurrency and NFT projects to spend on gambling. (Image: Crypto News)

DNP3 came clean via a Twitter post that began with the eye-catching phrase, “I’m sorry.” He then went into a long explanation of what he had done, admitting that he violated his backers’ trust and had illegally embezzled their money for his gambling habit.

NFTs are digital assets that represent collectible items, such as artwork, music, and more. Because they reside on a blockchain, they are immutable, verifiably unique, and immune to counterfeiting. Ownership cannot be forged and there is a permanent, openly-accessible record of all activity related to each asset.

The streamer used his Twitch popularity to gain support for three projects he started, including the Metaverse platform Gridcraft Network, the Goobers NFT series, and a cryptocurrency designed for charitable causes, CluCoin (CLU). However, he showed no restraint as he took the money and used it for his own purposes.

More Bad News for Crypto

The revelation comes on the heels of one of the largest cryptocurrency failures to date, that of the FTX trading platform. Sam Bankman-Fried, the founder of the exchange, will stand trial later this year for the platform’s implosion that saw around $32 billion disappear. He has pleaded not guilty in a US court after the country extradited him from the Bahamas.

DNP3’s failure isn’t on the same scale as that of Bankman-Fried, who once helped the White House form a COVID-19 prevention policy. However, it is still fraud and deception that further exacerbates an already unstable attitude toward the crypto community.

Every dollar I could find I would put into [crypto casino] Stake in hopes of winning big,” wrote DNP3 on Twitter. “Even when the big wins did happen, it wasn’t enough. Eventually, I lost everything. In addition to my own life savings, I also irresponsibly used investor funds to try and ‘get my money back’ from the casino, which was wrong for so many reasons.”

The streamer’s sudden admission comes after he confessed that he is “completely broken, both financially and spiritually.” He said he is working with gambling addiction specialists and coming forward publicly may have been part of the rehabilitation process.

No Transparency

There will now need to be an investigation to determine how much damage he caused. After DNP3’s revelation, the price of CLU lost 63% before falling to 75% at print time, and Goobers lost 9%.

Currently, there are reportedly just under 297 trillion CLU in circulation, which, after the price drop, are worth around $181.553. Last week, they would have been worth $881.810.

The NFT series, according to its website, includes 15K unique NFTs. It is based on a fictional story about a chemical company whose products come to life and enter the wild. The series contains NFTs of varying values, ranging from 0.0169 Ether (ETH) to 5ETH (US$21.14 to $6,253, based on current ETH prices.)

OpenSea, the NFT trading platform that sells Goobers, indicates that there have been transactions for Goobers totaling 968ETH. This alone is worth $1.21 million.

Because of a lack of transparency, there is no way to determine the actual financial value that DNP3 may have accumulated or gambled. It’s unclear if Stake will have to respond to any potential legal battles that might arise.