GameFi Projects Abandoned, but Crypto Assets Continue to Flow
- Nominis Research Team
- Mar 26
- 5 min read
Blockchain technology is set to revolutionize the gaming industry by reshaping how developers and players engage with gaming ecosystems. Its integration introduces innovative ways to enhance ownership, security, and monetization within virtual worlds. Given their familiarity with in-game digital economies, gamers quickly embraced cryptocurrencies, recognizing their potential to seamlessly merge with existing gaming infrastructures. As blockchain adoption grows, its influence will extend across all facets of gaming, transforming everything from asset ownership to player-driven economies.
The gaming industry continues to thrive, yet significant revenue losses persist due to fraud and unrealized gains. While digital assets and in-game economies have expanded, fraudulent activities have evolved, presenting a major challenge for developers and publishers. According to recent 2024 reports, virtual item fraud, unauthorized in-app purchases, and exploitative hacks remain widespread, particularly in regions with high digital adoption. These illicit activities distort fair play, disrupt revenue streams, and erode user trust, ultimately impacting both player retention and industry profitability. As fraud techniques become more sophisticated, gaming platforms must adopt AI-powered detection systems, blockchain verification for digital assets, and enhanced behavioral analytics to mitigate risks and secure their ecosystems.
It is known that notorious crypto hacking entity Lazarus Group, a North Korean state-sponsored team, have utilised DeFi gaming scams to infiltrate systems and steal funds. The group, held responsible for the recent massive Bybit hack , disguised DeTankZone, a legitimate NFT game, exploiting a zero-day vulnerability in Google Chrome’s V8 JavaScript engine. Attackers were able to take full control of any device visiting the site. Following reports in 2024, the exploit was halted, however it is known that LazarusGroup and subgroup BlueNoroff have been utilizing tools such as Manuscrypt, Cutwail and Turk to perform over 50 malware attacks, relying on NFT games to steal assets, since 2013. The group even used LinkedIn and X accounts to promote the fake game ‘DeTankZone’, releasing a game demo to trick users into downloading malware.
Other analysis has highlighted the frequency in the closure of blockchain games. It appears to be relatively common - in 2023, 31% of games tracked as part of an investigation, closed. While not all were rugpulls, and data concerning this specific subset is not readily available, rug pulls have been identified as a prevalent issue in the crypto space.
Recent analysis by the Nominis Research team revealed that crypto games like The Legend of Constellation and Epic Ballad, despite being abandoned, still show ongoing fund movements - strongly suggesting that in both of these cases, rug pulls have been committed at the expense of gamers.
Use Case 1: The Legend of Constellation
Little information is left online regarding Legend of Constellation, given the shut down of their social media platforms. A medium article in 2023 promised that this ‘web3.0 collectible card game’ commonly known as LOC, would ‘revolutionize Web3 gaming’. The article encouraged players to try the game, arguing that the innovative, blockchain based nature gives players ‘full ownership of in-game assets’ and incentivises players by suggesting the earlier they play, the higher the social and prestige value of their NFTs within the games’ community. Social media links appearing at the end of the article, written under the name “Legend of Constellation’, have been closed. An announcement made prior to 28/10/2023 on Facebook, by a user ‘John Smith’ announced the closure of ‘LOC’.
However, transactions continue to flow, and new wallets linked to these projects are being created, raising questions about whether these games were ever meant to be sustainable—or just another way to keep the money moving.
Investigations using Nominis Vue, the wallet screening platform, recognises the movement of money into wallets associated with the Legend of Constellation game, with the last transaction having taken place 4 months after the apparent announcement of the closure of the game.
The primary indicator of a game being labeled as “discontinued” is an extended period of inactivity, where there are no updates or engagement across its website and social media channels for months. Essentially, the project goes completely silent, while others have dropped crypto integration altogether. Neopets Metaverse abandoned blockchain due to lack of player interest, while Immortal Game removed its Web3 elements to combat cheating.
Use Case 2: Epic Ballad
Legend of Constellation is seemingly not the only NFT-based game to go dark, but with wallets still active. Epic Ballad Rise of Heroes, an ‘NFT Card Game embarking on the Web3 era’, has seemingly gone silent on social media platforms like X, with most recent posts from October 2024. This has naturally raised red flags within the crypto community, and inspired Nominis to perform deeper analysis.
While social media silence may suggest a complete game shutdown, blockchain analysis conducted using Nominis.io’s platform Nominis Vue reveals a more concerning reality - wallets associated with Epic Ballad remain active, and continue to interact within the crypto ecosystem. Transactions involving significant sums are still occurring - for example the wallet below, which has seen $450k worth of assets move through the wallet. This wallet was opened in February 2025, more recently than any activity on Epic Ballad’s platforms, and was last used just a week later. This suggests the owners of this Epic Ballad wallet are regularly opening and closing wallets, using them just temporarily to move large amounts of money.
Even more troubling is the evidence linking these wallets to sanctioned addresses. Activity logs show transactions flowing to and from wallets flagged for their involvement in illicit activities, raising serious compliance and regulatory concerns. Transaction analysis also demonstrates the association between Legend of Constellation wallets, and Epic Ballad wallets, with transactions.
This evidence led us to our conclusion - the creators of Epic Ballad have rugpulled their customers. The individuals behind the game appear to still be profiting from the project, despite having seemingly abandoned it in the public eye. While silence on social media alone does not suggest nefarious activity, the sheer number of sanctioned wallets that Epic Ballad wallets interact with raise serious concerns about their clear disdain towards regulation and compliance.
Final thoughts:
The cases of Legend of Constellation and Epic Ballad highlight a disturbing pattern in the blockchain gaming space. Projects that appear abandoned while their associated wallets remain active reinforce the major concerns surrounding rugpull frequency, but also expose the border risks of unregulated digital asset ecosystems.
Without thorough oversight, malicious actors can exploit blockchain technology, using gaming projects as a facade to siphon funds, evade sanctions and facilitate illicit financial activities. The lack of accountability in such cases erodes trust in the Web3 gaming industry and deters legitimate developers from innovating in the space.
Hence, robust crypto compliance measures are essential. Blockchain intelligence tools play a crucial role in identifying and flagging suspicious wallet activities, ensuring that businesses and investors do not unknowingly engage in tainted funds.
As the blockchain gaming industry grows, evolves and matures, compliance will only increase in importance. Without it, the cycle of rug pulls, financial crime and player deception will continue unchecked, threatening the trust and future of Web3 gaming.