NFT’s (Non-Fungible Tokens) are the new rage, riding the wave of the fascination with blockchain and cryptocurrency, two other things that do not seem to deter people from getting on the bandwagon even though they may have just the haziest idea of what they are. Naturally this leads to crooks moving in, selling NFTs of items that do not even belong to them.
When Lois van Baarle, a Dutch artist, scoured the biggest NFT marketplace for her name late last year, she found more than 100 pieces of her art for sale. None of them had been put up by her.
Van Baarle is a popular digital artist, with millions of followers on social media. She’s one of a growing number of artists who have had online images of their art stolen, minted as unique digital assets on a blockchain, and offered up to trade in cryptocurrency on the NFT platform OpenSea.
The rise in such thefts comes as the market for non-fungible tokens, or NFTs, exploded last year, growing to an estimated $22bn, attracting Sotheby’s and Christie’s, and driving multimillion-dollar auctions for these new certificates of ownership of digital assets.
…In theory, blockchain technology was supposed to make it easier for digital artists to sell unique tokens of ownership, offering buyers a permanent record of ownership linked to the work.
…But other artists say that the past year’s crypto boom has been a nightmare. Among the problems is that anyone can “mint” a digital file as an NFT, whether or not they have rights to it in the first place, and the process is anonymous by default.
“It is much easier to make forgeries in the blockchain space than in the traditional art world. It’s as simple as right-click, save,” said Tina Rivers Ryan, a curator and expert in digital art at the Albright-Knox gallery in Buffalo, New York. “It’s also harder to fight forgers. How do you sue the anonymous holder of a crypto wallet? In which jurisdiction?”
And then we have grifters taking advantage of people’s naivete. When there are opportunities for grift, it will not be long before the Trump family appears on the horizon. So it was hardly surprising to hear that Melania Trump was offering up for sale an NFT of a painting of her wearing a white hat, which you could purchase for a mere $250,000 opening bid.
Trump announced earlier this month that she would auction off the autographed hat, which she wore to meet the French president, Emmanuel Macron, and his wife during an official state visit in 2018. The auction also included a watercolor painting of herself wearing the hat and a non-fungible token, or NFT, of the painting.
She insisted that all bids be made in Solana tokens, a cryptocurrency.
…It said a “portion” of the proceeds derived from the auction would be given to provide people “who have been in the foster care community with access to computer science and technology education”.
Anyone want to make a guess what the size of the ‘portion’ given by her to charity would be? If you said more than 1%, then you are just the kind of person that this whole NFT business is targeting.
This was a considerable increase from the $150 she asked for a couple of months earlier for a watercolor of her eyes. Unfortunately, no one bid that amount for the hat, reaching only $170,000. But then something strange happened.
The $170,000 purchase of an NFT collection auctioned by Melania Trump was made by the entity that originally put the NFT up for sale, according to blockchain records.
After the auction’s conclusion, the New York Times ran a piece describing the sale as attracting a few bids all around 1,800 SOL, ultimately ending with somebody purchasing the NFT for 1,800 SOL worth $170,000 at the time (now $200,000), a price far below the figure touted by the auction’s press release and which the paper described as “deflated results” due to a wider crash in the price of cryptocurrencies.
Now, according to Solana blockchain records reviewed by Motherboard and shared with an independent researcher, we know who bought the NFT collection: Melania Trump herself, or at least, whoever set up the auction for her.
…Despite the transparent nature of the blockchain, however, Trump’s office would not elaborate on who actually bought the NFT or the details around why the transaction was set up so that the creator of the NFT provided the crypto to the auction winner, and seemingly got the funds back.
…The Office of Melania Trump did not respond to follow-up questions regarding the identity of the alleged mystery buyer, how the transaction was conducted, if it was conducted in USD, and how much USD the buyer ultimately paid.
Novelist Richard Hines probably captured the situation best.
I'm not saying most #NFTs are scams operated by grifters and money launderers. I'm just saying Melania Trump is launching an #NFT.
— Richard Hine (@richardhine) December 16, 2021
Melania was probably the only person in the world who was upset to discover that DJT was not, actually, a billionaire. I’m sure she’s going to make out just fine, but not as well as she thought she would.
A slight quibble with the language of the article:
Her art was not for sale on the NFT marketplace, NFTs of her art were on sale. Meaning, a grift cashing in on her labour, but not her actual art.
I just call them “non-fungible tulips.” Hopefully the economists will get the reference and explain it to investors…
Anyone want to make a guess what the size of the ‘portion’ given by [Melania] to charity would be?
Does her charity even exist?
Also, no reputable auctioneer or auction-house has any excuse to go near these all-too-fungible tokens. It’s their job to know better, and to do all the necessary research when they find they don’t.
If artists like van Baarle get enough advance notice, they could barge into auctions where their work is being sold, and loudly remind all the buyers that they’d be bidding for something that’s already available elsewhere. Or, in other words, to funge as many of those “non-fungible” tulips whenever they can.
“If you said more than 1%, then you are just the kind of person that this whole NFT business is targeting.”
I would not be surprised if it is exactly 0%. We are not dealing with ordinary grifters here.