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The Dark Side of NFTs
Last Updated: June 30, 2023
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GM Readers!📪 It's BitDegree Insider, and grab your Web3 soda can.
⭐️Today's selection:
- ⚔️SEC vs Bitcoin ETFs
- 🌑The Dark Side of NFTs
- 🧩️Answer To Thursday Quiz
- 👌Selected Meme of The Day
- 📰Bite-Sized News
SEC vs BITCOIN ETFs
Before we get into the real Friday mood… let's run throughugh some urgent news.
SEC says spot Bitcoin ETF filings are inadequate.
Applications for spot Bitcoin ETFs have been rejected by the SEC, as they were "inadequate," according to WSJ.
The regulator informed BlackRock and Fidelity that the submitted documents were not sufficiently clear and complete.
The companies have the opportunity to make changes and reapply.
Bitcoin reacted by dropping.
Seems like a highly speculative moment, doesn't it?
Wait a minute, the situation isn't as grim.
The crucial detail is buried deep in the story.
The SEC is asking for more information, specifically, for further details about the surveillance-sharing agreement (SSA).
This is a reasonable request and could even be considered positive news. It's generally assumed that these details would need to be updated anyway.
Yet… the traders aren't up for a good time.
TL;DR: The SEC has deemed spot Bitcoin ETF filings by BlackRock and Fidelity as inadequate, but the rejection may not be as negative as it seems, as the regulator is requesting more information, particularly about surveillance-sharing agreements, which is seen as a reasonable request and an opportunity for the companies to make the necessary changes and reapply.
THE DARK SIDE OF NFTs (or the awkward side)
It's Friday. Let's go exploring something more fascinating. And, thanks to the findings of NFT researcher Lamboland, we've got something nice for you.
Let's revisit one of the biggest blunders in Web3 trading history. To be more precise, let's visit 3 very revealing situations.
SITUATION #1
Remember Franklin? He was one of the top BAYC collectors and still owns a golden one (aka a very expensive ape).
Unfortunately, he made a mistake that cost him $160k in just minutes.
Here's how things went down...
Franklin was fed up with people making fake bids on NFTs. So, he wanted to change things.
In response, he created a unique domain: stop-doing-fake-bids-its-honestly-lame-my-guy.eth
As a joke, he made a fake 100 ETH bid on his own NFT.
This move caught someone's eye, and they offered him 1.9 ETH for his own NFT. Franklin was quick to accept.
But here's what Franklin didn't take into account…
While Franklin was busy celebrating his 1.9 ETH win on Twitter, he forgot to cancel the 100 ETH bid he had placed on his own NFT.
An Opensea user named "MemeWasBorn" suddenly found themselves $160k richer.
Out of sheer desperation, Franklin sent MemeWasBorn 1.9 and a note, asking for his money back.
In return, MemeWasBorn sent him this:
The price for this thing is still above 3 ETH, but Franklin never got his 100 ETH back.
And here's how a meme was born.
SITUATION #2
Dino Dealer, a simple nickname for someone behind the monitor or an NFT degen, made an investment in an image of a digital rock.
This decision soon paid off as these rocks started fetching prices in the six-figure range.
Wanting to secure his earnings, Dino decided to price the rock at a staggering $1 million.
However, he encountered a major issue...
When listing his rock, Dino made a devastating typo.
Rather than setting the price at a cool $1.2 million, he unwittingly listed it for a mere penny.
OUCH.
Before Dino could rectify his error, a bot pounced and purchased the rock.
Just like that, in one swift click, Dino's entire fortune evaporated. Talk about a rocky road…
But… Why would anyone have their entire wealth invested in a digital rock image?
According to Dino, his net worth was "non-existent before the rock."
But the saga continues...
A claim was made by Dino's former best friend, stating that they bought the rock JOINTLY.
Hence, he too missed out on a potentially transformative amount of money.
The public, learning of this twist, reacted with satisfaction to Dino's loss.
Yet, Dino refuted the allegations made by his ex-close friend.
He asserted that his old buddy had no knowledge of the rock at the time of purchase.
To rub salt into the wound, that very same rock was resold for $640k just a few days later.
SITUATION #3
Imagine making your wife mad because you just sold an NFT…
I mean… It sounds as if you just made some extra cash… that should be good for her as well, no?
Apparently no…
The exact reason—maybe it was sold too cheap, or it was very dear to them, or something else—we don't really know. But here's what happened:
A guy known as KBM on crypto Twitter sold his penguin NFT.
The price? $16,000.
This penguin was from the same collection we talked about yesterday.
So, after selling it…KBM realized he missed his penguin. He wanted it back.
So, he tried to buy it back. He offered 13 ETH ($22,000) for the NFT he just sold.
But someone was quicker and offered more…
KBM wasn't ready to give up. He placed a new bid of $32,000. Lucky for him, his offer was accepted.
So KBM got his penguin back!.. Or… DID HE?
Here's the catch...
KBM had forgotten about an old listing he had for the penguin.
Just minutes after KBM got it back, someone else bought the Penguin from him.
Thankfully, KBM was able to talk to the new owner.
He bought back his penguin again, for a price he didn't disclose.
TL;DR: Situation #1: NFT collector accidentally lost $160k by forgetting to cancel a fake bid on his own NFT, which was bought by another user. Situation #2: NFT investor mistakenly listed a digital rock for a penny instead of $1.2 million, losing his entire fortune when a bot bought it, and later his friend claimed joint ownership. Situation #3: A man sold his penguin NFT for $16,000 but regretted it and tried to buy it back, only to sell it again minutes later. Eventually, he repurchased it from the new owner at an undisclosed price.
ANSWER TO YESTERDAY'S QUIZ
Yesterday we asked you this:
And, as always, you did a great job. The right answer to this puzzle is… BITCOIN!
SELECTED MEME OF THE DAY
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