Coachella NFT Gathering Disappears As FTX Implodes

Photo Credit: Coachella.com

The Coachella NFT collection that promised lifetime passes to the festival is now in limbo as FTX implodes.

Unveiled earlier this year, ‘Coachella Collectibles’ was advertised as “a first-of-its-kind opportunity to own lifetime festival passes, unlock unique on-site experiences, physical items and digital collectibles.” Only the tokens that promised these benefits were backed by a cryptocurrency exchange that has now filed for bankruptcy protection.

What happened to FTX?

Cryptocurrency exchange FTX appears to have lent its customer deposits to sister company Alameda Research. Alameda Research is a crypto hedge fund that has invested broadly in the ecosystem with very little discretion. When Alameda Research collapsed, FTX became insolvent with a $10 billion balance sheet hole. FTX filed for bankruptcy protection on November 11.

The problem is that FTX was a major player in the NFT space with its venture capital arm, FTX Ventures. it invested in many NFT projects, including Yuga Labs’ Bored Ape Yacht Club. FTX was also the primary issue for NFT collections for both Coachella and Tomorrowland. Major sports brands captured on staff include the Golden State Warriors, Washington Wizards and Capitals, Dolphin Entertainment and Mercedes F1.

Members of the Coachella staff seem to be as blindsided by the stock market collapse as anyone else. In a message posted to the festival’s Discord server, the organizers say they are not sure what to do. “Like many of you, we’ve been watching this news unfold online for the past few days and are shocked by the outcome,” a message on the Discord server reader.

“We currently have no lines of communication with the FTX team. We have assembled an internal team to come up with solutions based on the tools we have access to. Our priority is to get the Coachella NFTS out of FTX, which appears to be currently disabled,” the statement continued.

The collapse of FTX could have far-reaching consequences in the crypto world. “FTX’s reputation carries significant weight in the perception of cryptocurrency among retail users and investors,” add Gökçe Güven, founder and CEO of Kalder. “The FTX collapse has affected the average consumer who is less embedded in the crypto industry more than any other collapse since FTX was globally known and trusted. The NFT industry will see an increase in fear and skepticism among mainstream users in the short term.”