CNN Suddenly Shuts Down Its NFT Marketplace, Collectors Call It A ‘Rape Pull’
CNN has been accused of a “rug pull” after it suddenly shut down the Web3 project Vault by CNN, leaving collectors in the dark.
The news network has sparked outrage among collectors who paid thousands for non-fungible tokens sold by Vault, CNN’s own NFT marketplace, which was created in 2021 to “give collectors the opportunity to own a piece of history.” Investors can pay for digital ownership of CNN news reports or artistic interpretations.
In a message on Monday, members were told that the company had decided to end what it said was initially a “6-week experiment” and that they would be compensated “pro rata based on the total purchase price of each wallet’s NFTs in according to a snapshot taken on October 6, 2022.” A separate message from CNN employee “Jason” confirmed that this would amount to “approximately 20% of the original coin price of each Vault NFT owned.”
Developers also added that the NFTs will remain under the ownership of those who purchased them and that the website will remain open to be used as a marketplace so that the collections can still be viewed. In addition, unsold NFTs must be burned, making the rest “rare”.
“Carpet covers”
Despite assurances, collectors in their Discord server expressed disappointment. Many worried they wouldn’t get their money back and accused CNN of a “rug pull,” a term that describes a situation where investors or collectors are blindsided by a project that is suddenly abandoned by developers, leaving them with nothing.
“Is a carpet announcement meant to be comforting to a community that waited patiently for slow but promised benefits?” asked a user in Discord, referring to the collectible perks listed on the site as “coming soon.”
Another user described the decision as one that was made “with little care or concern for collectors and plans, in a painstaking corporate manner.”
“Poor choice for a company of this size. No one will welcome CNN onto web3 if NFTs ever explode again, another user wrote.
Several also expressed confusion over the company’s use of the phrase “6-week experiment,” since it was never advertised as such, and there appears to be no evidence that CNN has used this description in the past. CNN representatives did not immediately respond to requests for comment.
The announcement came with little explanation, and several signs suggest that CNN planned to continue its NFT project. Documentation on the marketplace’s website includes a 2022 roadmap detailing upcoming benefits for members, including a virtual gallery experience, exclusive events for collectors and even the ability for collectors to create their own NFTs in the CNN article.
But while CNN reportedly made over $300,000 from sales, the values of NFTs have declined and investing in them is not as popular as it once was. Bloomberg, citing data from Dune Analytics, recently reported that trading in non-fungible tokens in September has returned to pre-bubble levels, with monthly volume falling 97% from a peak in January.
This story was originally featured on Fortune.com
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