CNN Pledges 20% Refund After Being Accused of Pulling the Rug on NFT Investors
Multimedia outlet CNN has announced the end of Vault, a non-fungible token (NFT) marketplace highlighting major moments from its history, less than four months after its launch.
The collection, called “Vault by CNN: Moments That Changed Us,” included a series of tokenized iconic news moments from CNN’s 41-year history.
In their Discord server, CNN staffer Jason said that users would receive 20% of the original minting price of the NFT tokens in the form of stablecoins or FLOW tokens deposited into collectors’ wallets.
“We learned a lot from our first foray into Web3, and we are excited to carry Vault’s concepts around community storytelling into future projects,” said Vault. “While we will no longer be developing or maintaining this community, the Vault NFT collections will live on.”
What was Vault?
Vault by CNN launched in the summer of 2021 as a marketplace for its own NFTs that would “offer collectors the opportunity to own a piece of history.”
It was comparable to NBA Top Shot, except for media nerds instead of basketball nerds. It coined CNN reports of key events or artistic interpretations inspired by them, creating digital collectibles that owners could somehow display or trade with others, like baseball cards.
Apparently, this idea seemed more reasonable while cryptocurrency prices were skyrocketing, and headlines about NFTs didn’t include phrases like “trading volumes collapse 97 percent since January peak.”
Things have obviously changed as the “crypto winter” has settled in, although an April report from the Press Gazette said that CNN had made more than $300,000 from the sales.
In a Discord channel, another message informed owners that while Vault’s website “will undergo changes,” it will remain available for them to view their collections and use their marketplace.
CNN Accused of Rug Pull
Community reactions included shock, disappointment, and some signs saying they planned to contact their lawyers while accusing CNN of “pulling out the rug,” which in crypto terms applies when a development team unexpectedly obtains support and funding from a project, leaving the people who bought with nothing.
On Discord, CNN said it plans to compensate “the thousands of collectors who joined us in this experiment” with distributions based on the purchase price of each wallet’s NFTs as captured on Oct. 6.
In a separate CNN message, staff member “Jason” said: “The distribution will be FLOW tokens or stablecoins deposited into each collector’s wallet. We are currently working out the details, but we expect the distribution amount to be approximately 20% of the original minting price for each Vault NFT we own.”
He also pointed out that the actual media for NFTs is stored on IPFS, a distributed file system that should mean they will continue to be available even if CNN’s website goes down.
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