Sammy Baker

NFTs Promoted by Celebrities Crashes as Investors lose Funds

May 23, 2022

It is no news that NFTs have no regulations within the digital space, which is why investors sometimes proceed to invest in NFTs without proper information, losing their funds in the process.

Recently, this has been the case as some investors lost their funds simply because they went ahead to invest in an NFT influenced by a celebrity without due information.

Floyd Mayweather and Tyler: A Case Study

NFTs

When Mayweather began advertising for an NFT project on Twitter this year, Tyler was one of those investors who took an interest in what he had to say.

Tyler, a property manager, was a fan of Floyd Mayweather and, at the same time, he was in search of profitable investment opportunities, so it was no surprise that he went ahead and invested in the NFT project.

Bored Bunny NFT Project

NFTs

The Bored Bunny NFT project is a series of images of rabbits, similar in comparison to the Bored Ape Yacht Club images that helped fuel a boom in NFT art projects.

Tyler went ahead and invested as much as $12,000 with the expectation that the NFT project would increase in value and he would get to make some profit by the time he sells them.

Unfortunately for him, however, the value of the NFT project dropped drastically and became far less than what Tyler bought them for.

This event crippled Tyler financially as he was convinced that the team behind the NFT project and Mayweather profited from the naivety of the public and robbed them in the process.

This NFT project was a project that initially promised investors two to ten times the value of their investments, but right now, the floor price of a Bored Bunny NFT sits at $104, down from its mint price of $1,504 at the time it was being promoted.

When asked, Mayweather’s publicist declined to comment, and the team behind the NFT project disavowed any wrongdoing even though they refused to provide their real names.

This event is just one example among many where social media influencers and celebrities have convinced their fans to purchase an NFT project without providing them with relevant information or at least letting their fans know that they were paid to promote the project and advising them to be wary of the financial risks involved.

This is what experts have referred to as a “rug pull,” which is an ongoing problem that is affecting a lot of vulnerable people out there.

More Insights

The Securities and Exchange Commission, responsible for investors’ protection, has yet to offer guidance as regards the existence of NFTs simply because the technology is relatively new.

This loophole has become something celebrities and misleading NFT projects are now taking advantage of.

Some fans have even gone ahead to sue the likes of Mayweather and other celebrities for misleading them, but nothing of the sort has come out of that.

At the end of the day, fans and investors who have seen their funds vanish into thin air have not given up on NFTs and crypto.

Rather, they have decided to be more careful and learn from their lessons going forward.