Since interest in NFTs – essentially unique digital tokens – has boomed this year, many people may be adding them to their holiday wish lists.
However, one crypto enthusiast’s recent experience buying NFTs connected to rapper Tekashi 6ix9ine has left them feeling ripped off.
“It turned out to be a huge scam,” the purchaser, Jacob, told Rolling Stone. He requested that the magazine withhold his last name.
NFT stands for non-fungible token. Most are part of the Ethereum blockchain, named after the Ethereum cryptocurrency. While coins of Ethereum are identical each NFT is unique, like a piece of original art. The Verge compared trading NFTs to trading collectibles such as baseball cards or Pokémon cards.
Jacob, a 26-year-old London resident and investor, told Rolling Stone he learned about Trollz, a collection of NFTs backed by Tekashi 6ix9ine, in late October via social media posts. He spent around $40,000 on more than 82 of the “creepy cartoons” included in the collection, said the outlet.
Daniel Hernandez, a 25-year-old rapper who goes by the stage name Tekashi 6ix9ine, pleaded guilty to nine felony charges in January 2019 and was released from federal custody the following April to serve four months of home incarceration. His charges included violent crime and drug trafficking.
“TROLLz is a unique collection of 6969 NFTs by 6ix9ine. The collection consists of 120+ atributtes and characteristics. TROLLz model is to give back to charity and holders while creating a fun experience for fans and crypto users worldwide,” said a description of his NFT project on the trollznft.io website. A philanthropy component and other features are also mentioned.
Royalty holders like Jacob were promised power to “vote on all decision making and what to do with the funds.”
“This project is directly influenced by his involvement, so anything promised on TROLLz web/discord will be delivered,” according to a section on the site titled “is this a scam or rugpull?”
However, Jacob said he has yet to receive royalties. He also said he has not been able to access other promised features, such as a weekly game, or evidence of philanthropy.
When Jacob first decided to mint (publish a unique instance of an NFT on the blockchain), the Trollz team said there would eventually be 9,669 NFTs in the collection. Then, the option to mint was removed on Oct. 30, with only 4,797 minted. Upon minting, each NFT holder was supposed to get royalty rights equal to five percent of transactions when the tokens changed hands, said Rolling Stone.
“A few minutes prior to our launch, we were attacked and scammers hijacked our server and sent a fake website ending in .com to all channels,” a moderator named Trollz wrote in a post on Discord, an instant messaging platform.
According to Jacob and five other Trollz owners who spoke with Rolling Stone, at one point, bots started spamming fake Trollz minting links, leading people to send money without getting anything. The hack may have come from a member of the Trollz team, said messages cited by the outlet.
Moderators said some people impacted would be refunded. However, the Trollz holders who spoke with Rolling Stone fear the project may have been a cash grab.
There hadn’t been an announcement on the existing Discord channel for the project in over a month as of Friday.
Jacob and other users were banned from the official Trollz Discord and have since started a new server with around 100 people who were kicked off.
As fans of Tekashi 6ix9ine, they still believe the NFTs can be valuable despite the issues with the project. They hope their experience also leads to more regulation of NFTs.
A business partner of 6ix9ine and members of the Trollz team did not respond to Rolling Stone’s request for comment.
Tekashi 6ix9ine isn’t the only well-known figure to attach their name to NFTs. Just this week, former First Lady Melania Trump made headlines when she announced plans to launch an NFT platform.
So far this year, at least $26.9 billion worth of cryptocurrency has been spent on NFTs, according to Chainalysis. A CNBC report said Millennial and Gen Z gift buyers are interested in NFTs this year as well.
“Before you dive in and buy NFTs for all your nearest and dearest, be aware that they won't be right for everybody,” said the Motley Fool about buying NFTs as gifts this holiday season.
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