Playboy loses $5 million on Ethereum earned from NFT sales

Parent of Hugh Hefner’s Playboy, PLBY Group, has revealed a $4.9 million loss on Ethereum it held last year – citing a crypto winter as the cause.

Playboy’s NFT collection, Rabbitars, launched in 2021 at the peak of the NFT craze. According to the 10-K form filed on Thursday, the value of its digital assets was $327,000 last year. But in September 2022, PLBY’s records showed a value of $1.75 million in digital assets.

In fact, since Rabbitars was released two years ago, the price of Ether has plunged over 60%.

• PLBY considers its digital assets as “intangible assets with an indefinite life”.
• They are subject to impairment if the fair value of the assets at any time falls below the balance sheet value.
• Impairment losses cannot be recovered – even if the fair value increases again.

“The market price of an Ethereum in our main market ranged from $964 – $3,813 during the year ended December 31, 2022, but the book value of each Ethereum we held at the end of the reporting period reflects the lowest price of an Ethereum listed on the active exchange at any time since receipt,” PLBY explained in its submission.

“Therefore, negative fluctuations in the market price of Ethereum can have a material impact on the Company’s earnings and book value, while the only time an increase in prices will positively affect the Company’s earnings is when Ethereum held on the balance sheet is sold at a profit,” the filing said.

Playboy has been crypto-curious for years

Indeed, Playboy has had a long history with NFT, Bitcoin and blockchain. In 2018, it planned to integrate a crypto token called Vice Industry Token (VIT) on its platforms. VIT would be used to reward viewers for viewing the content, leaving comments and voting.

It even planned to introduce a crypto wallet on its website. However, the Canadian blockchain startup it partnered with to make it happen, Global Blockchain Technologies (GBT), was sued by Playboy for fraud and breach of contract.