Tag Archives: NFTs

Former Head of Product At OpenSea Sentenced To Three Months In Prison

Nathaniel Chastain, a former head of product at OpenSea, was sentenced to three months in prison and fined $50,000 on Tuesday, according to Inner City Press, The Block reported.

Chastain, 31, was a “first time offender” and had a “potentially promising future,” a judge in the U.S. District Court for the Southern District of New York said on Tuesday, according to Inner City Press.

Chastain was convicted in May in what prosecutors called the “first ever digital asset insider trading scheme” following a trial that focused on his alleged NFT insider trading.

The U.S. Attorney’s Office Southern District of New York posted a press release “Former Employee Of NFT Marketplace Sentenced To Prison In First-Ever Digital Asset Insider Trading Scheme”. From the press release:

Nathanial Chastain Traded on Inside Information About NFT’s That Were Scheduled To Be Featured On The Homepage of the Largest NFT Marketplace

Damian Williams, the United States Attorney for the Southern District of New York, announced that NATHANIAL CHASTAIN, a former product manager at Ozone Networks, Inc. d/b/a OpenSea (“OpenSea”), was sentenced to three months in prison in connection with a scheme to commit insider trading in Non-Fungible Tokens, or “NFTs” by using confidential information about which NFTs were going to be featured on OpenSea’s homepage for his personal financial gain. CHASTAIN was previously convicted at trial of wire fraud and money laundering…

…According to court filings and statements made in court:

As part of his employment, CHASTAIN was responsible for selecting NFTs to be featured on OpenSea’s homepage. OpenSea kept confidential the identity of featured NFTs until they appeared on its homepage. After an NFT was featured on OpenSea’s homepage, the price buyers were willing to pay for that NFT, and for other NFTs made by the same NFT creator, typically increased substantially. In violation of the duties of trust and confidence he owed to his employer, OpenSea, CHASTAIN exploited his advance knowledge of what NFTs would be featured on OpenSea’s homepage for his personal financial gain.

From approximately June to September 2021, CHASTAIN used OpenSea’s confidential business information about what NFTs were going to be featured on its homepage to secretly purchase dozens of NFTs shortly before they were featured. After those NFTs were featured on OpenSea, CHASTAIN sold them at profits of two-to-five times his initial purchase price. To conceal the fraud, CHASTAIN conducted these purchases and sales using anonymous digital currency wallets and anonymous accounts on OpenSea.

In addition to the prison term, CHASTAIN, 31, of New York, New York, was sentenced to three months of home confinement, three years of supervised release, a $50,000 fine and ordered to forfeiture the Ethereum he made trading the featured NFTs.

To me, it seems like an incredibly stupid idea to do what this man did. It seems impossible that he would have assumed that his company would never find out what happened to those NFTs.

CNN Has Abandoned It’s NFT Project

On Monday afternoon, as pointed out by Parker Molloy, CNN ended its big Web3 project by announcing, “We have decided that it’s time to say goodbye to the Vault by CNN.”, The Verge reported.

Parker Molloy tweeted: “Just saw that CNN announced the end of its bizarre NFT market where they’d sell NFTs of news stories.”

CNN tweeted the following from its @Vaultbycnn account: “News of our own to share”. It was followed by a screenshot that provided an explanation:

Fellow collectors –

The Vault team is honored to have partnered with amazing journalists, producers, artists, photojournalists, and collectors from all over the world during our time together, but we have decided that it’s time to say goodbye to Vault by CNN.

Vault was originally launched as a 6-week experiment, but the support and engagement from our community let us expand this project into something much larger. Thank you to each of you for your interest and engagement in what we built together.

At CNN’s core is a spirit of innovation and experimentation, going right back to our founding in 1980. 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.

While we will no longer be developing or maintaining this community, the Vault NFT collection will live on. Head over to our Discord server for more on that.

Thank you for joining us for a great year of journalism, art, and community.

– Vault by CNN

According to The Verge, the Discord channel for CNN’s NFT project informed owners that while the Vault website will “undergo changes,” it will remain available for them to view their collections and use its marketplace. Reactions from the community included shock, disappointment, and a few posters saying they planned to contact their lawyers while accusing CNN of a “rug pull”, which in crypto terms applies when a development team unexpectedly yanks support – and funds – from a project, leaving the people who bought in with nothing.

The Discord message also informed holders of CNN’s plan to “burn” unsold NFTs, which it says will make the ones they hold rarer, and thanked collectors for joining the “experiment.” CNN publicist Garett Cowan tells The Verge that the six-week experiment mentioned in the message was an internal test leading up to the June 2021 public launch.

For what it’s worth, The Verge reported that Vault by CNN lasted 16 times as long as CNN Plus.

Personally, I have no interest in spending money on NFTs. That said, I am aware that there are people who want to buy them. It seems reasonable that some of the people who bought NFTs from CNN are upset about the abrupt ending of Vault by CNN.

Starbucks Introduces Starbucks Odyssey

Starbucks announced Starbucks Odyssey, a new experience powered by Web3 technology that will offer Starbucks Rewards members and Starbucks partners (employees) in the United States the opportunity to earn and purchase digital collectable assets that will unlock new benefits and immersive coffee experiences.

Starbucks claims it is one of the first companies to integrate non-fungible tokens (NFT’s) with an industry-leading loyalty program at scale, while creating a digital community that will enable new ways for Starbucks to engage with its members and partners.

Personally, I’m not quite certain that what Starbucks claims is accurate about being the first to allow people to “unlock new benefits and immersive experiences”.

In August of this year, Small Business Trends reported that Taco Bell and Decentraland had hosted a contest where they chose one couple for a full wedding experience in Decentraland’s digital universe.

Mashable reported earlier this month that Minecraft announced it would not get involved with NFTs, but brands like Gucci and Tiffany are getting into non-fungible tokens, and M&M’s are releasing a Board Apes version of its candy. Mashable also reported that brands believe in NFTs, but consumers don’t.

What does Starbucks Odyssey offer?

According to Starbucks, Starbucks Odyssey will be an extension of Starbucks’ Rewards program that members can access using their Starbucks Rewards login credentials. Once logged in, members can exchange Starbucks Odyssey ‘journeys’, a series of activities, such as playing interactive games or taking on fun challenges to deepen their knowledge of coffee and Starbucks. Members will be rewarded for completing journeys with a digital collectable ‘journey stamp” (NFT).

Members can also purchase ‘limited-edition stamps’ (NFTs) through a built-in marketplace within the Starbucks Odyssey web app experience. Limited-edition stamps will be available for all members to purchase directly with a credit card. No crypto wallet or cryptocurrency will be required – making the Starbucks Odyssey experience a fun and easy way for members to access this new technology and claim an ownership stake in their loyalty to Starbucks.

Each digital collectable stamp will include a point value based on its rarity, and the stamps can be bought or sold among members within the marketplace, with ownership secured on a blockchain. As stamps are collected, members’ points will increase, unlocking access to unique benefits and experiences that have never been offered before. These experiences could range from a virtual espresso martini-making class, to access to unique merchandise and artist collaborations, to invitations events at Starbucks Reserve Roasteries or even trips to Starbucks Hacienda Alscia coffee farm in Costa Rica.

In addition, Starbucks says it is committed to reducing its carbon, water, and waste footprints and is taking a thoughtful and thorough approach as the company works towards the launch of Starbucks Odyssey this year. They will utilize a “proof-of-stake” blockchain technology built by Polygon, which Starbucks claims “uses less energy than first generation “proof-of-work” blockchains.

As for me, I’m really not a fan of NFTs so I won’t be participating in Starbucks Odyssey. If you are a Starbucks Rewards member, you can sign up for the Starbucks Odyssey waitlist starting today.

GameStop Launches NFT Marketplace After Laying Off Workers

GameStop fired its top executive and other layoffs at Game Informer. An article on Game Informer, posted on July 8, 2022, stated that GameStop “which is in the process of pivoting its business around crypto” fired one of its top executives and laid off a number of Game Informer staff.

In a filing with the US government, GameStop said it “terminated” CFO Michael Recupero effective immediately. Recupero started as GameStop CFO just about a year ago in June 2021.

In its filing, GameStop said Recupero was fired “without cause,” but the company did not share any further details around the nature of circumstances of his existence. Recupero is not getting a severance payment beyond what was in his initial offer letter but he is entitled to certain pay, rights, and benefits not disclosed in the filing.

CNN reported, from a GameStop memo it obtained, CEO Matt Furlong wrote: “After making more than 600 corporate hires in 2021, and the first half of 2022, we have a stronger understanding of our transformation needs.” He continued, “This has positioned us to right-size headcount across several corporate departments”.

Kotaku reported: While confirmation of the layoffs began pouring in on LinkedIn, it’s not yet clear how many are affected. The layoffs appear to be focused on GameStop’s Grapevine, Texas, headquarters, but all appear to include some staff at Game Informer, the decades-old gaming magazine acquired by the retailer when it bought Funcoland back in 2000.

Wikipedia says that GameStop started with Babbages, a Texas company that was founded in 1984. in October of 1999, Barnes & Noble Booksellers purchased Babbage’s Etc. for $215 million. In May of 2000, Barnes & Noble acquired Funco (which may explain why there were so many Funco Pops in the Barnes & Noble stores). In addition, Barnes & Noble acquired Game Informer, a video game magazine that was first published in 1991. Funco was renamed GameStop, Inc., in December of 2000.

The New York Times reported (in October of 2004) that Barnes & Noble decided “to spin off its majority stake in GameStop, a retailer of video games.”

GameStop has launched an NFT Marketplace, the long-awaited debut of its online marketplace for non-fungible tokens, or NFTs, in a bid to reinvent its business and cash in on consumer adoption of cryptocurrencies and blockchain technology. CNBC reported on July 11, 2022.

According to CNBC, GameStop’s platform, which is now open to the public for beta testing, allows users to connect their own digital asset wallets, including the recently launched GameStop Wallet, the company said in a press release. They will then be able to buy, sell, and trade NFTs of virtual goods. Over time, the marketplace will expand to offer other features such as Web3 gaming, GameStop said.

CNBC noted: The company is trying to win over investors who may have written GameStop off as a legacy retailer with too many store fronts in outdated shopping malls. Now, the company is “tapping into buzzy areas like NFTs for growth”.

Personally, I don’t see GameStop becoming the next big thing for those who want to not only collect NFTs, but also want to stick around for some NFT-connected games. I don’t think GameStop will be able to compete with OpenSea.

Phishing Scam in Discord Separates People from their NFTs

I’ve seen people on Twitter, who are into cryptocurrency and who have those hexagon shaped avatars (that they had to pay for), praise the blockchain. There appears to be a widely held concept that the blockchain is safe because it cannot be changed.

Some of those people, who are in NFT focused Discords learned a lesson the hard way. Vice reported that the Discords of multiple NFT projects were hacked as part of a phishing scam to trick users into handing over their digital jpegs. This included the Discords for Bored Ape Yacht Club, Nyoki, Shamanz, Doodles, and Kaiju Kingz all of which were targeted.

Scammers put phishing posts into those Discords. According to Vice, the goal of the hack was to trick people into clicking on a link to “mint” a fake NFT by sending ETH and in some instances an NFT to wrap into a token. Motherboard viewed a message to that effect in a Discord that had a compromised bot.

Those who responded to the phishing post – in the hopes of being able to “mint” an NFT (that turned out to be fake) were unaware that they had fallen for a scam.

Vice provided the following explanation in their article:

Two wallet addresses have been tied to the hacks, now labeled Fake_Phishing5519 and Fake_Phishing5520 on blockchain explorer Etherscan. At least one Mutant Ape Yacht Club NFT (a BAYC spinoff by developer Yuga Labs) was stolen and quickly sold by the 5519 wallet, which sent 19.85 ETH to the 5520 wallet.

The second wallet sent 61 ETH ($211,000) to mixing service Tornado Cash early Friday morning. The latest transaction is a transfer of ETH to a previously inactive wallet that then sent the same sum to an incredibly active wallet currently sitting on 1,447 ETH ($5 million), 6 million Tether coins ($6 million), and an assortment of other tokens.

The blockchain itself might be secure. Unfortunately, there will always be people who fall for an enticing phishing scam. Those unfortunate people won’t get their cryptocurrency or NFTs back.

Ubisoft Players Made it Clear they Don’t Want NFTs in Games

Ubisoft recently launched Ubisoft Quartz, which would enable Ubisoft to add NFTs into (at least some of) their games. The Ubisoft Quartz website specifically mentions Tom Clancy’s Ghost Recon Breakpoint, which the company chose to start putting NFTs into.

It appears that the majority of people who play Ubisoft’s games were not happy about that decision. According to VideoGamesChronicle, “Ubisoft delisted its announce trailer for its Ubisoft Quartz platform, following overwhelming backlash that saw it receiving a dislike-like ratio of around 20:1”.

Here is a small piece from the VideoGamesChronicle post:

…While the number of viewer interactions has slowed as a result, it still continues to gain likes and dislikes, with the ratio growing ever wider.

At the time of writing, it now stands at 23,447 interactions, of which 1,018 are likes and 22,429 are dislikes.

This means just over 4% of viewers liked the video…

Ubisoft Quartz website is currently in beta. Part of the description states: “This is the place where you can acquire Digits, the first Ubisoft NFTs (non-fungible-tokens), playable in a HD game and relying on energy-efficient technology.” Ubisoft is offering three Digits for free, for a limited time.

What can you do with an Ubisoft NFT? Not much, it seems. Ubisoft appears to be trying to emphasize the “uniqueness of your Digit”. These come in limited editions with an ‘immutable” amount of items. Each Digit has a serial number that is displayed on the collectible and in-game item. According to Ubisoft, “only you have control of this Digit!”

Ubisoft also wrote: “Each Digit will also be tied to the player names of all its previous and current owners… bringing you fame for years to come!” In the FAQ section, Ubisoft stated: “Once you’re done playing with them, you can put them on sale on an authorized third-party marketplace. If it gets purchased by another Tom Clancy’s Ghost Recon Breakpoint player, you would then be able to acquire a new one or use your proceeds as you see fit.”

To me, this all sounds sketchy. It feels like a money grab from Ubisoft, in the hopes that players will buy decorative in-game items. Ubisoft claims that the Tezos blockchain that Ubisoft Quartz is using is more energy-efficient than the Bitcoin blockchain. That doesn’t mean it is good for the environment! Ubisoft needs to rethink this idea.

Valve Bans Blockchain Games and NFTs on Steam

Valve has made an update to its “What You Shouldn’t Publish on Steam” list. That list includes things that one would hope game creators would know better than to publish in a game. It makes sense for Valve to spell things out very clearly, in order to avoid problems.

A new addition to the list disallows “Applications built on blockchain technology that issue or allow exchange of cryptocurrencies or NFTs”. I expect that some people will not be happy about this, especially those who built games involving one of both of those things.

For example, The Verge reported that this change was pointed out by SpacePirate_io, on Twitter, who appears to be the developer of a game called Age of Rust.

One of the tweets in SpacePirate_io’s thread says: “Steam’s point of view is that items have value and they don’t allow items that can have real-world value on their platform. While I respect their choice, I fundamentally believe that NFTs and blockchain games are the future. It’s why I started this journey with all of you”.

According to The Verge, there have been some situations involving NFTs that have been sketchy. One example is the CS:GO skins and Team Fortress 2 hats. The Verge also notes the Evolved Apes saga, “where a developer sold NFTs with the promise that they’d be included in a fighting game but then seemingly took the money and ran.”

Where can developers of games that include blockchain or NFTs go? The answer appears to be Epic Games.

Epic Games CEO & Founder Tim Sweeney tweeted: “Epic Games Store will welcome games that make use of blockchain tech provided they follow the relevant laws, disclose their terms, and are age-rated by an appropriate group. Though Epic’s not using crypto in our games, we welcome innovation in the areas of technology and finance.”

In my opinion, welcoming games that use blockchain technology and NFTs could be a big gamble for Epic Games. That decision may cause people who play video games, and who dislike blockchain based games, to select games that don’t have that stuff in them. I’ve seen some tweets in which people encourage others to avoid buying games from companies that welcome the types of games that Valve has removed from Steam.