Treasure NFT: Risks, Legitimacy and Identifying Red Flags

Key Summary:
Treasure NFT is not a legitimate NFT marketplace. It operated as a Ponzi-pyramid scheme that promised daily returns of 4.3 -- 6.8%, froze withdrawals in March 2025 after collecting an estimated $160 million. It subsequently rebranded as Treasure Fun and then NovaNFT. West Bengal Police issued public advisories naming it fraudulent in April and May 2025. Legitimate NFT projects generate value through digital art, gaming, and community utility, not through referral chains or guaranteed income. In India, NFTs are classified as Virtual Digital Assets (VDAs) under the Finance Act 2022 and taxed at 30% flat. No Indian regulatory body has authorised any NFT platform to offer guaranteed investment returns.

Introduction: The Hype About Treasure NFT

In early 2025, a message spread through WhatsApp groups across India, Pakistan, and Bangladesh. It went something like this: “I already withdrew twice. You should try it.” The recommended app was called Treasure NFT. By March 2025, the same app had frozen all withdrawals, leaving thousands of investors unable to access their funds.

This article explains what Treasure NFT was and how it collapsed, how genuine NFT projects actually work, and the simple checks every Indian investor should run before putting money into any NFT platform.

Key Takeaways:

• Treasure NFT was a Ponzi-pyramid scheme, not an NFT marketplace. It collapsed in March 2025, froze withdrawals, and rebranded. West Bengal Police named it fraudulent in official public advisories.
• Any platform promising daily or monthly guaranteed returns from NFT trading is operating a fraudulent scheme. No legitimate investment product offers this.
• Legitimate NFT projects (CryptoPunks, BAYC, Pudgy Penguins, Treasure DAO) derive value from art, community, utility, and verifiable on-chain trading, not from referral chains.
• NFTs are legal in India as Virtual Digital Assets (VDAs). Gains are taxed at 30% flat + 1% TDS under the Finance Act 2022. Losses cannot be offset. Declare in Schedule VDA of your ITR.
• Before engaging with any NFT platform: verify on-chain activity, check FIU-IND or SEBI registration, confirm no guaranteed-return promises, and verify founder identity.
• If you lost money to Treasure NFT or similar schemes, file a complaint at cybercrime.gov.in. Do not invest in any successor platform.

What Was Treasure NFT? The Full Story of the NFT Scam in India

Treasure NFT (treasurenft.xyz) surfaced as a mobile app and web platform in 2024 and went viral across South Asian messaging networks in early 2025. It marketed itself as “the world’s first comprehensive NFT trading platform powered by AI price algorithm trading”, promising daily returns of 4.3–6.8% and monthly profits of up to 30%.

How Treasure NFT Operated

The mechanics followed a textbook multi-level scheme:

• Step 1 — Deposit: Users deposited USDT (USD Tether, a dollar-equivalent stablecoin) to purchase NFTs on the platform. However, the NFTs were not traded on any verifiable external marketplace.
• Step 2 — Promised returns: The platform credited small daily returns to user accounts, creating the appearance of active earnings. Early users who withdrew small amounts received their money, which seemed proof of legitimacy.
• Step 3 — Referral acceleration: A multi-level referral system rewarded users for recruiting others. The more traders you recruited, the higher your projected returns were. This was the structure of a classic pyramid scheme embedded inside the investment pitch.
• Step 4 — Withdrawal freeze: On 23 March 2025, Treasure NFT halted all withdrawals, citing a “platform upgrade”. Withdrawal timelines were first extended to 96 hours, then to 168 hours. The withdrawals were never processed.
• Step 5 — Exit and rebrand: The original platform went dark. A new domain named treasurefun.xyz appeared, accepting the same login credentials and requesting additional deposits. The West Bengal Police brought explicit attention to this manoeuvre in their May 2025 advisory. A third rebrand, NovaNFT, followed in November 2025.

The Scale of What Happened

Data Point	Verified Detail
Funds collected in Pakistan (single event)	Approximately $143.8 million in a single 6-hour “Blind Box” event on 24 March 2025 (Express Tribune, local press reports)
Estimated total victims	100,000+ investors across Pakistan; significant numbers in India and Bangladesh
India regulatory action	West Bengal Police issued public fraud advisory on X (@WBPolice) on 4 April 2025; expanded notice on 6 May 2025 naming both Treasure NFT and Treasure Fun as fraudulent
Rebrands (as of July 2026)	Three: Treasure NFT → Treasure Fun → NovaNFT. Each shared the same operational structure.
SEBI / RBI registration	None. Treasure NFT held no registration with any Indian financial regulator.
FinCEN MSB licence (claimed)	An MSB (Money Services Business) licence governs anti-money laundering compliance only. It does not authorise the offering of investment returns and does not signal business legitimacy.
Recoverability of funds	Funds inside the closed system are unrecoverable through the platform. Investors should file complaints at cybercrime.gov.in

⚠ Important:  
If you or someone you know invested in Treasure NFT, file a cybercrime complaint at cybercrime.gov.in with evidence of your transactions. Approach your local police cybercrime cell. Do your due diligence and do not deposit additional funds into Treasure Fun, NovaNFT, or any platform claiming to be a successor.

Is Treasure NFT Real or Fake?

Treasure NFT is not a real, legitimate NFT platform. It operated as a Ponzi-pyramid scheme and was named as fraudulent by West Bengal Police in 2025. There is no verifiable NFT trading behind it, no Indian financial regulator ever registered it, and the “returns” it advertised were simply paid out of new users’ deposits until the withdrawals froze on 23 March 2025. That also means the token and NFTs sold on Treasure NFT have no independent market value.

Once withdrawals were halted, any holding inside the platform became worthless, and the later rebrand to Treasure Fun, reusing the same login credentials and asking for fresh deposits, was a textbook attempt to extract one more round of money from the same victims. If you are weighing it against other investment scams circulating in India, the pattern is identical: guaranteed daily returns, aggressive referral incentives, and anonymous operators. The sections below break down exactly which red flags gave it away.

Red Flags That Identified Treasure NFT as a Scam

Every element of Treasure NFT’s model contained warning signs that were visible before the collapse. Understanding them helps identify the next iteration, because these schemes always rebrand and relaunch. For a broader primer on protecting yourself, see CoinDCX’s guide to crypto security best practices.

Red Flag	What It Actually Means
Guaranteed daily returns of 4.3–6.8%	No legitimate investment,  anywhere in the world, guarantees daily returns. Fixed Deposits give ~7% per year. Treasure NFT claimed 30% per month. This is mathematically impossible from real NFT trading.
Multi-level referral earnings	When the platform’s revenue comes from recruiting new depositors rather than from genuine trading or utility, you are inside a pyramid structure. NFT marketplaces earn from transaction fees, not from who or how many you bring in.
No verifiable blockchain transactions	Real NFT sales are publicly traceable on blockchain explorers (Etherscan, Solscan). Treasure NFT’s claimed trading had no verifiable on-chain record.
Anonymous founders	The CEO and CTO were named as “Steven Alexander” and “Bob Steven”, both names that could not be verified to real individuals with trackable professional histories.
Withdrawal delays of 96–168 hours	Legitimate crypto withdrawals settle in minutes to hours. 96-hour withdrawal windows are a mechanism to buy time during a liquidity crisis. This is  a classic Ponzi signal.
No SEBI / RBI registration	Any platform offering investment products or promising returns to Indian residents must be registered with SEBI or RBI. Treasure NFT had neither. This alone made it operating outside Indian law.
Pressure to recruit, not to trade	Users were rewarded primarily for recruiting others, not for trading NFTs. This is the definitional structure of a pyramid scheme, regardless of what asset class it claims to involve.
Rebranding after collapse	The rebrand to Treasure Fun using existing user credentials and requesting further deposits is a textbook exit-scam technique designed to extract one final round of funds before disappearing.

How Legitimate NFT Projects Actually Work

Treasure NFT’s collapse does not mean all NFT projects are fraudulent. Legitimate NFT ecosystems operate on fundamentally different principles.

The Legitimate NFT Value Chain

A legitimate NFT project has a verifiable on-chain presence. Every transaction, be it a mint, sale, or transfer,  is recorded permanently on a public blockchain and can be verified by anyone using free tools like Etherscan (for Ethereum-based NFTs) or Solscan (for Solana-based NFTs).

Examples of Established NFT Projects

Project	Blockchain	What It Is	How Value Is Generated
CryptoPunks	Ethereum	10,000 pixel-art characters	Pioneer status (launched 2017); cultural cachet; one of the first NFT collections; owned by Yuga Labs
Bored Ape Yacht Club	Ethereum	10,000 generative ape PFPs	Brand licensing, commercial rights for holders, access to the BAYC community and events, Yuga Labs ecosystem drops
Pudgy Penguins	Ethereum	8,888 penguin characters	Physical toy licensing deals, community-driven brand expansion, significant retail presence
Treasure DAO / MAGIC	Arbitrum	Gaming ecosystem token	Decentralised gaming metaverse with real games, real users, real transaction volume; fully on-chain and auditable. Not to be confused with Treasure NFT.
OpenSea / Blur	Multi-chain	NFT marketplaces	Revenue from transaction fees on real secondary market trading. No guaranteed returns, price is determined by buyers and sellers.

Notably, even well-known legitimate NFT collections have experienced steep price declines. According to CoinGecko and DappRadar data, floor prices for blue-chip NFT collections fell 50–80% from their 2021–2022 all-time highs. This is the real risk of legitimate NFT investing: market-driven price decline.  This is very different from a Ponzi scheme, but it is still a significant risk that Indian investors must understand.

Legitimate NFT Project vs Fraudulent NFT Scheme

Criteria	✅ Legitimate NFT Project	❌ Fraudulent NFT Scheme
Revenue source	Buyers and sellers trading on an open marketplace; platform earns transaction fees	Deposits from new investors; earlier investors paid using newer investors’ funds
Return structure	Market-driven, no guaranteed returns; prices can fall to zero	Guaranteed daily/monthly returns (mathematically impossible from real trading)
Blockchain transparency	All transactions publicly verifiable on Etherscan, Solscan, or equivalent	No verifiable on-chain trading record; claimed activity not traceable
Referral model	Optional affiliate programmes; not the primary earning mechanism	Multi-level referral earnings are the primary income source for most users
Founder identity	Named, traceable founders with verifiable professional histories	Anonymous or unverifiable names; no linked professional presence
Withdrawal speed	Crypto withdrawals settle in minutes to hours on legitimate platforms	Extended withdrawal windows (96–168+ hours); funds locked under pretexts
Regulatory status	Registered with relevant regulatory bodies; compliant with AML/KYC requirements	No SEBI/RBI registration for Indian operations; no authorisation to offer returns
When recruitment slows	Trading volume may fall; floor prices decline; community activity slows	Platform freezes withdrawals and collapses or rebrands immediately

How to Evaluate Any NFT Platform: A 5-Point Check

Before engaging with any NFT platform, run through these five checks. All five can be completed in under ten minutes using publicly available information. You can apply the same method to research any NFT project (DYOR) before you invest.

1. Verify On-Chain Activity

Any legitimate NFT marketplace will have a verifiable transaction history on a public blockchain explorer. Search the platform’s smart contract address on Etherscan.io, Solscan.io, or the relevant chain explorer. If there is no public contract address or if the claimed trading activity cannot be verified, it is a critical red flag.

2. Look Up Regulatory Registration

Indian investors can check whether the platform is registered with the FIU-IND (Financial Intelligence Unit of India) for AML/KYC compliance. For platforms offering investment products, check for SEBI registration. Platforms registered with the FIU-IND comply with India’s regulatory framework, but unregistered ones operating in India have no such accountability.

3. Question Claims of Guaranteed Return

No legitimate NFT platform or investment product in India can legally offer guaranteed returns. If a platform promises fixed daily or monthly income from NFT ownership, regardless of how the technology is described, treat it as a Ponzi scheme until proven otherwise. The technology (AI trading, algorithm, blockchain) does not change this principle.

4. Verify Founder Identity

Look up the founders and team members by name. Search their professional profiles, past companies, and other verifiable history. Legitimate NFT projects, even the pseudonymous ones, have traceable operational teams with real community accountability. Anonymous founders with no verifiable background are a serious warning sign.

5. Check Community Channels and Independent Reviews

Legitimate NFT communities are active on Discord, X, and dedicated forums. Instead of relying solely on promotional content, look for discussions from independent users about the project’s real utility, trading volume data from market analytics platforms, and any negative experiences shared by investors. A platform that discourages independent verification or relies primarily on WhatsApp chain messages for promotion is self-selecting for a credulous audience.

FAQ’s