Since Bitcoin’s rise to prominence in 2017 and subsequent explosion to over $40,000 per coin in 2021, the idea of cryptocurrencies has become more and more normalized. From cryptocurrency pillars like Ethereum to the flash in the pan that was DogeCoin, an entire spectrum built on blockchain technology has emerged and as time has gone on, it has appealed to a wider audience.
And in appealing to that wide audience, blockchain technology has been used in different ways both to display seemingly-endless possibilities and give a window into what the future of production and consumption might look like.
Arguably the best example of that futuristic view of production and consumption are NFTs.
NFTs (non-fungible tokens) are best described as unique identifiers that are recorded in a block chain and ensure that whatever digital asset they are attached to cannot be “copied, substituted or subdivided.” Like a serial number on a baseball card, an NFT ensures that whatever digital asset its attached to is authentically what it is supposed to be and also is a 100% guaranteed identifier of that assets scarcity.
Because many NFTs signify scarcity, the value of certain NFTs can be astronomical and, with the technology’s explosion of popularity, more and more people have dived headfirst into buying and selling the non-fungible tokens. And, because of the astronomical values and price tags on some NFTs, more and more rich, famous, and powerful people have taken the plunge into the blockchain-secured world.
Among those rich, famous, and powerful people have been many rappers and rap-game affiliates.
The NFT for the cover of Jay-Z’s debut album Reasonable Doubt was auctioned off for $138,600. Method Man released an NFT comic book series. Eminem released NFTs and invested in an NFT startup called “MakersSpace.” Nas and Pusha T invested in a streaming platform based on the same blockchain technology that birthed NFTs and most recently, the legendary Snoop Dogg revealed that he had been running an NFT-influencer Twitter account and partnered with Ethereum-based video game “The Sandbox” for a new NFT.
The rap game and NFTs have taken to each other like peanut butter and jelly, and this August, Toronto rapper Tory Lanez tried his hand using the technology.
In the wake of charges of felony assault with a semi-automatic firearm and carrying a loaded, unregistered firearm in a vehicle stemming from the Megan Thee Stallion case, Lanez followed up his 2020 release Daystar, with When It’s Dark, an NFT-exclusive album fans could purchase on E-NFT, an NFT marketplace.
In releasing When It’s Dark as an NFT, “the idea was for each copy of the album to be minted with a one-of-a-kind token, providing a fool-proof ledger of ownership,” Rolling Stone reported. “The value of NFTs comes from their verifiable scarcity … Similarly, the idea was for Lanez’s NFT album to appreciate in value once it became available to resell on the E-NFT marketplace.”
Upon the release of When It’s Dark, Lanez, who reportedly was an “early equity holder” of Emmersive Entertainment, the company behind E-NFT, the “SKAT” rapper immediately took to Twitter, saying that the NFT album had sold “one million copies in under a minute and that one of his NFTs had already been flipped for $50,000.”
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Unfortunately, there is no evidence to support Lanez’ claim.
In an in-depth investigation into When It’s Dark and all of the question marks surrounding it, a brand new report from Rolling Stone revealed a series of issues that consumers faced while trying to purchase the record, while trying to sell the NFT copies of the record, and while trying to withdraw the NFT copies of the record into their personal collections. The music publication also took it a step further, deep-diving into the potentially fraudulent promotion that Lanez partook in and why a few simple social media posts could be considered faulty investment advice.
Soon after the When It’s Dark release and alleged success, fans began having problems with the E-NFT marketplace and the album itself. An NFT artist named Frag said he purchased 10 copies of the album for $10 during the project’s presale window but that E-NFT crashed as soon as the marketplace opened up and didn’t come back online for more than 24 hours.
Frag took to Twitter to share his concerns about the NFT, its trading process, and a series of unexplained fees. He eventually landed in a back-and-forth with Lanez, ending with the rapper calling him a clown.
In another case of suspicious activity surrounding When It’s Dark, a co-owner of the New York-based NFT agency Third Planet Studio also purchased 10 copies of the album at $1 each. Not necessarily interested in the album itself, this was a move based on research.
“We purchased multiple albums during presale to see what features they offer, and if this was a platform we would consider using for our own musicians,” the Third Planet Studio co-owner told Rolling Stone.
After the initial marketplace crash, the Third Planet co-owner attempted to sell a copy of the album for $1,000. She received an email confirming the NFT had sold and the asset was removed from the collection, but she hasn’t seen any payment. Similarly, she also tried removing two copies of the album to put in her personal NFT wallet and received confirmation that the transfer had been completed, but the actual transfer never happened. The NFTs never made it to her personal wallet.
And in addition to withdrawal and transaction issues, questions have risen about Lanez’ role in the entire operation.
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Because he owns equity in the company behind E-NFT, it has been argued that every tweet or social media post about When It’s Dark is a sort-of trading tip and that, if Lanez was lying about how many copies of the album had sold or lying about how much certain copies of the album sold for, he could have been misleading potential buyers and, in turn, violating laws set in place by the Securities and Exchange Commission.
Writing that it is possible “Lanez telling their followers that an NFT is re-selling for thousands of dollars is tantamount to investment advice,” the report continues on to say that “From a practical standpoint. If you’re putting an NFT out there so it looks like it can be traded, and that it appreciates in value, then it could be considered security and would need to be registered … If (Lanez is) hyping up the value on social media, that could fall within what is considered a security.”
If it is found that Lanez was engaging in some type of securities fraud, the rapper could face some pretty serious charges.
“In 2018, Tesla CEO Elon Musk agreed to pay a $40 million penalty after the SEC sued him for securities fraud,” the report reads, adding that Musk tweeted about a potential buyout of his company, leading its stock price to soar.
Rolling Stone concluded that this case is not as bad as something like Bernie Madoff’s retirement fund jackings back in the mid-2000s, but for a guy already facing serious charges for allegedly shooting Megan Thee Stallion in the foot, any type of fraud or law-breaking activity is sure to draw the ire of many and serious consequences.
Did you grab the When It’s Dark NFT when it dropped? Let us know if you had any issues with it and your thoughts about this whole Tory Lanez situation down in the comments.
[Via]
