CNN faces accusations of an NFT rug pull
CNN’s foray into the world of NFTs has come to an untimely end with an announcement that Vault (opens in new tab), which promised to let users “collect NFTs of historic CNN moments and artistic representations,” is closing.
“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 said in a message posted on Twitter.
“Vault was originally launched as a six-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.”
Vault was launched in June 2021 as a repository for “digital collectibles”—NFTs—drawn from CNN’s archives. The plan was to begin with six weekly drops including “key historical moments organized around specific themes including early CNN exclusives, world history, and Presidential Elections,” followed by future drops featuring a wider range of topics.
“Tokenholders will be able to showcase and display their Moments on a user page in the Vault,” the Vault website states. “Some limited edition sets will include a premium video display case that will render a physical representation of the Moment on a screen.”
Naturally, there was also a promise of money to be made: CNN said Vault would “experiment with a variety of selling formats including both open editions and limited editions.”
This is the sort of thing CNN was offering for sale:
CNN said in the announcement that while Vault will no longer be developed or maintained, “the Vault NFT collection will live on.” Unsurprisingly, not all owners of CNN NFTs found that statement satisfying. Multiple responses on Twitter accused CNN of a “rug pull,” a term used to describe scammers who promote an NFT but then take the money and run.
It’s a bit of a stretch to ascribe that to CNN, which clearly isn’t relying on NFTs sales to cover the bills: It’s on track to earn nearly $1 billion in profit (opens in new tab) in 2022—and take note, that is the network’s worst performance since 2016 and apparently a cause for alarm, because the world in which we live is fundamentally broken. More to the point, everyone involved got what they paid for. Vault is going away but the NFTs will continue to exist, at least as much as NFTs can be said to exist at all.
But other complaints about CNN characterizing Vault as a six-week experiment that ran its course are harder to shrug off. In fact, the 2022 roadmap is still posted on the Vault documentation site, promising everything from a new Photography for Change series of NFTs to “exclusive CNN perks for Vault collectors” and the ability to mint NFTs based on any CNN article you want.
It’s not going much better on the Vault Discord (opens in new tab), where complaints of a rug pull and demands for refunds (and occasional threats of legal action) are common. Partial refunds apparently will be offered: Details will be announced later but Vault Discord admin Jason said in a message that they will be offered as either Flow or stablecoins valued at approximately 20% of the original mint price for each NFT owned. That hasn’t gone over especially well either.
“20% is way low,” one Discord user wrote. “75% or higher. I will reach out to my lawyer this week. Six week experiment was never conveyed to us.”
“Literally a joke,” another replied. “It’s all goin’ to zero once you guys shut down.”
One user indirectly (and perhaps unintentionally) suggested that the relatively low refund offering is due to the fact that people aren’t really losing anything. Vault NFTs will remain accessible and tradeable on Flow-compatible NFT marketplaces even after Vault itself is gone. That’s good news for people who want to keep their digital collectibles (and some people in the Vault Discord said they’ll continue to treasure them as such) but the worry for ‘investors’ is that the end of Vault will make it more difficult to turn a profit on Vault NFTs in the future.
“As an investor I don’t know if I can expect to break even in a few years,” the Discord user wrote. “Is CNN able to share why they think 20% is fair b/c to me that implies they hopefully think we can break even or make profits within a few years right? if not then this seems like a rug pull. What optimism are they basing the rebate percentage on?”
I’ve reached out to Vault administrators for more information on the refund offering, and will update if I receive a reply.
