NFT (Normalising Fake Transactions)

Actually, as I am sure you know, and NFT or non-fungible token is a non-interchangeable unit of data stored on a blockchain, a form of digital ledger, that can be sold and traded. Like all things block chain people are making a fortune and it is very hard not to get caught up in the hype or as I found out, it is very hard not to get caught out by the hype.

My son approached me and said he and few friends wanted to try and invest in an NFT series by Markus Magnusson who had designed a range of 5000 unique characters who would each have a cool outfit and a few props with an animated gate. They were not “minted” which means you didn’t know which one of these characters you would be buying. At minting date and algorithm of some sort would randomly choose the outfit, accessories/props and gate of each character. It sounded cool because you could research and find some of Magnusson’s work online, the uncertainty around the minting process created additional excitement and it was a chance to have some fun.

But school was about to get into session and the lessons would come thick and fast and they would be expensive.

Lesson 1: Gas Fees. We went onto the OpenSea (interesting fact that Pirates historically operated on the open sea but we will get back to that in lesson 4).

We searched for and found the Invisible Friends range all numbered, listed as Invisible Friends and all with the same identical icon. We bought one for 0.0227526 Ethereum (about $70 USD at the time) BUT by the time the gas fees, transaction costs had been added we paid 0.2417 Ethereum (about $700 USD). A whopping 10x base cost in transaction fees! We could have pulled out of the transaction but hey it was a piece of online digital art and I have spent loads on money on “real” art which has offered mixed returns for me in the past – so what the hell. After warning the kids about the seemingly prohibitive costs I was assured that the price would go up and we would make all MY money back.

We paid the price, paid the gas fees and got a congratulatory email from I mean OpenSea:

You successfully bought Invisible Friends#127!

Congratulations! You successfully bought Invisible Friends#127 on OpenSea.

VIEW ITEM

You can check out your recent activity here.

Lesson 2: Poor support was like casting a message in a bottle onto - well onto the open sea.

As soon as we tried to view out purchase…nothing. It disappeared from the OpenSea platform and did not appear in our wallet (you need a basic understanding of crypto trading to follow this - which I might not be best qualified at assisting with.)

No answer, followed by poor service after various follow up emails. Eventually a patronising explanation that once it is bought the NFT doesn’t show on their platform anymore and then finally the NFT eventually appeared in our wallet. We got excited.

Lesson 3: When it seems too good to be true, it is an NFT!

I kept watching the prices online and can you imagine my surprise when on the OpenSea platform there was an offer for $15 000 and then $16 000 USD for Invisible Friends#127. The boys had been right and we had made all our money back and a tidy profit.

Then I sat and watched while someone else accepted the bid and I wondered what the hell was happening. So in desperation I decided to cast another message in a bottle out onto the open sea in the hope of a response. It took a while but finally the support line at OpenSea came back to me. Remember the pirates…….. here we go with that story.

An OpenSea Customer Experience email came through which was patronising to a point while also:

1.)   offering a different explanation as to why I couldn’t see my purchased NFT on their platform as to what they had finally explained in Lesson 2 which now that I think about it might not have been a valid lesson. (Dam did I just lose a lesson and an NFT?)

2.)   admitting that they had participated in a fraud (which they then after the fact withdrew from their platform);

3.)    graciously offered to refund their commission they “earned” on facilitating the fraud (I know right – this is Robin Hood type stuff here!); and

4.)   then claimed the “buyer beware” moral high ground and proceeded to blame me for not doing my homework.

(p.s. just for the fun of it they took the opportunity to be little a competitive site called Showtime and claim they did stuff like this that was dodgy.)

I have included their email below my rant for everyone to make up their own mind.

My assertion is that OpenSea has either knowingly or through extreme negligence participated in and facilitated fraud and that to claim the buyer beware defence is absolutely ridiculous. To try and make sense of my claim let’s interlace the story with the real world for some context.

Had I gone to a dodge flea market, bazaar or other area known for selling fake goods and bought a pair of Nike shoes and then latter found out they were fake – well that would be on me.

In fact, I wondered into a reputable shop on 5th Avenue (this is OpenSea advertised as the place to be). I walked to the shelf that advertised Nike shoes in bright lights and on the shelf stood identical looking Nike shoes (most of them original and all of them identical on the surface and all of them presented as original). We chose one, paid for it and left the reputable store. When we got home the shoe fell apart and I rushed back to the store – they said – You are new to Nike shoes and should have checked more carefully. We don’t have those fake ones anymore but hey we will give you 2.5% back.

Now when we searched for Invisible Friends on the OpenSea platform – a load of dodgy results came up, each with a small variation in the name, the spelling or the spacing (almost like the fake shoes, handbags etc we are used to seeing on some streets). We navigated our way through all this until we came to the page with hundreds of Invisible Friends for sale. They all had the right name, the right (identical) pre minting logo and all stood listed next to each other in a neat little row.

This is not a case of Buyer beware – this is clearly a case of a seemingly reputable exchange like OpenSea intentionally or negligently facilitating fraud.

Non-Fungible token

Your request (271201) has been updated. To add additional comments, reply to this email.

Chakey D.

OpenSea Customer Experience (OpenSea)

Mar 15, 2022, 5:37 GMT-11

Hey Paul,

Thanks for reaching out, I'm here to help clarify what's going on.

I completely understand that this response is quite late and I would like to sincerely apologize for all the delays. We all really appreciate your understanding.

If you're new to NFTs, it can all be a little overwhelming at first and it is completely understandable for I've been in the same situation and you've come to the right place. I really feel sorry to hear of the inconvenience you have experienced and I know this is kind of confusing. I understand you have successfully purchased an item but suddenly it went off from the account and it is very disappointing. Allow me to help you and make sure that everything will go well and fun with your NFT journey.

I looked into the transactions in your wallet address in Etherscan and found this transaction hash (0x19c84REDACTED). Taking a look at the item’s history, your NFT was delisted for violating our terms of service, meaning it will no longer appear on our platform. I understand that this can be really disappointing, and will provide a little more information about why this can happen.

When you purchase an unreviewed NFT on OpenSea, you are prompted to click a checkbox asserting that you have read our terms of service.

Confirming this acknowledges that you are aware that it has not yet been reviewed, have researched the origin of the NFT, and accept responsibility for verifying the authenticity and legitimacy of the NFT before purchase. Because you purchased an unreviewed NFT, OpenSea will not be able to reverse or refund any associated transaction, as all actions taken on the blockchain are permanent.

However, I've gone ahead and requested that we refund back to you the 2.5% commission taken on the sale by OpenSea. Our team will be back in touch shortly once that has been issued.

Please rest assured that you do still own your NFT, even if we aren’t able to display it on our platform anymore. Any delisted tokens (NFTs) purchased will still be in your wallet. You will be able to view delisted ERC-721 tokens on websites like Showtime, but currently, ERC-1155 NFTs are not visible on wallets and websites like Showtime.

Thanks again for your patience and understanding amidst this frustrating situation. We're going to be back in touch with you regarding the refund of OpenSea's commission as soon as possible. In the meantime, I am here to help if you have any other questions or concerns.

Chakey D.

OpenSea Customer Experience