​Hermes of Paris (pvt) is among the most well-known global luxury item brands, generating $9.7b in sales in 2021.  The company has a broad variety of products ranging from watches to fragrances, but is best known for its leather work, particularly women’s handbags, and the 1984 release of the “Birkin Bag” set a high water mark for status and quickly became collector’s items, with certain custom Birkin’s selling at auction for over $380,000 and a number of publications citing the fact that the value of Birkin bags has increased at a rate higher than that of the S&P 500.  
A digital entrepreneur by the name of mason Rothschild decided that he would create NFT assets under the name “Metabirkins”, starting with “Baby Birkin” a digital image of a 40-week old fetus on top of a transparent version of a Birkin bag on his website, the success (the original NFT sold for $23,500 in May of 2021 and was resold for $47,000) of the Baby Birkin prompted Mr. Rothschild to create additional Metabirkins which he offered on OpenSea (pvt) in December 2021 using the Metabirkin trademark and advertised the NFT’s on the Metabirkin website, with links to OpenSea, Discord (pvt) and a number of other similar sites, using the Birkin mark, the Hermes mark, and the slogan “Not your mother’s Birkin” and stated “MetaBirkins are a tribute to Hermes’ most famous handbag, the Birkin, one of the most exclusive, well-made luxury accessories.”
After a letter was sent to the site by Hermes, a disclaimer was added, stating “We are not affiliated, associated, authorized, endorsed by, or in any way officially connected with the HERMES, or any of its subsidiaries or its affiliates. The official HERMES website can be found at https://www.hermes.com/”, although the disclaimer was not posted on any of the NFT sales sites.  On December 26, 2021, however OpenSea removed the MetaBirkin NFTs after receiving notice from Hermes and Mr. Rothschild moved the collection to Rarible NFT (pvt) and continued to advertise the MetaBirkin digital assets, also adding the NFTs to the LooksRare (pvt) marketplace, again using the MetaBirkin trademark, and a similar offering on Zora (pvt).  As of January 6, 2022 total sales of MetaBirkin NFTs were $1.1m, although Mr. Rothschild had complained publicly that there were a number of ‘counterfeit’ MetaBirkins being circulated on NFT platforms.
With Hermes requesting a jury trial, only days ago, the jury came back with three guilty verdicts, one for trademark infringement, one for trademark dilution, and one for ‘cybersquatting’, the practice of registering company or brand names, in order to sell them, and awarded Hermes $133,000.  Most important however was “4th” verdict, “Having found the defendant liable for trademark infringement and/or trademark dilution and/or cybersquatting, we the jury find that the First Amendment protection does not bar liability”.  This links the MetaBirkin NFTs to strict trademark rules rather than those re4lating to artwork, which has been the mantra for NFT ‘creators’ since their inception and will end Mr. Rothschild’s plans to create 1,000 MetaBirkins for which he was to receive $450 each and 7.5% of secondary sales.  We assume his legal team will appeal the ruling, but we expect, at least for now, it will send a message to the NFT community that it cannot infringe on public trademarks.

We are taking this pre-holiday Friday off to do some holiday shopping, however we must note that the NFT world was taken by surprise yesterday when former President Trump made what was thought to be an announcement as to his 2024 running-mate, but turned out to be the announcement of a series of Digital Trading Cards showing the former president as a variety of characters.  The collection consists of 45,000 NFTs[1] that sold for $99 each, with none of the cards having more than 20 copies, and some limited to as few as one copy. The buyers are not able to select the cards they are buying as they are randomly chosen upon purchase.
Then there are the ‘deals’ that go along with Trump card purchases as a sweepstakes event.  These are taken from the promotion on the “Collecttrumpcards.com” site, with the details added by us, along with the stated value, which is only given in the detailed sweepstakes rules:

• Really Big Prize – Gala Dinner with Donald Trump at Mar-a-Lago including: ($75)

The finest dinner prepared by a top chef
The presentation of D. Trump videos, photos, and footage
Music playing throughout the evening
A branded Trump 45 Wine glass, that you can take home
Plenty of fantastic photo opportunities
Note: The sweepstake details point out that this is a 2,000 person dinner

• Meet & Greet with D. Trump ($0/Priceless)

             Exclusive meet & greet for cocktail hour at Mar-a-Lago with D. Trump
             A chance to chat with the former President and ask questions
Note: The sweepstake details point out that this is a 200 person group that lasts for 30 minutes

• Individual Meeting with D. Trump ($0/Priceless)

             An individual sit down with the former President at Mar-a-Lago in his private club
             “Ask all the questions you want and get all the advice you can handle from the man who changed America”
Note: The sweepstake details point out that you get 20 minutes

• Golf with D. Trump   ($300)

             Play for 1 hour in a foursome with D. Trump at his Palm Beach golf course
             If you are not a golfer you can trade your prize or sell it.

• Zoom Call with D. Trump  ($0/Priceless)

             Ask all your questions over Zoom (10 Minutes)

• Group Zoom with D. Trump  ($0/Priceless)

             Lucky winners will be able to join this exclusive group meeting
             Note: The sweepstakes details that the call will be with 2,000 participants and will last 20 minutes with no guarantee that any questions will be answered

• Hand-Signed Memorabilia  ($100)

             Signed photographs and other memorabilia sent directly to you

• Gold Digital Trading Cards   ($100)

             There will e a limited number of rare Gold Edition cards that are digitally signed by D. Trump with an actual video of him signing your gold edition collectible.

• Books!    ($75)

             You could win a copy of one of D. Trump’s books, with some being signed by the former President (Specifically “Our Journey Together”)

• But Wait there’s More!

             18 holes at the Trump International Golf Course (D. Trump will not be in attendance)   ($575)
             Dinner for two at the Trump Hotel in Las Vegas (D. Trump will not be in attendance but you will be treated as a ‘friend’ of the President)    ($250)
             Dinner for two at Mar-a-Lago (D. Trump will not be in attendance but again you will be treated as a ‘friend’ of the President)    ($250)
             Dinner for Two at Trump Tower in NY (D. Trump will not be in attendance but his office will call to make sure they know you are family)     ($250)
             Mystery Prizes of Trump Memorabilia
As part of the initial offer, if you were to purchase 45 cards, you get 45 entries into the sweepstakes shown above PLUS a guaranteed dinner with D. Trump.  We do note that according to the sweepstake rules, you can enter without having to purchase anything as long as you are over 18 and not living in Balkans, Belarus, Burma, China, Cote D’Ivoire (Ivory Coast), Cuba, Democratic Republic of Congo, Iran, Iraq, Liberia, North Korea, Russia, Sudan, Syria, Zimbabwe, and the Crimea, Luhansk and Donetsk regions of Ukraine, or a family member of the sponsor, by send a SSAE to the location shown below in Newark, NY.


[1] 1,000 will not be sold in this offering

While the Trump campaign or the Trump organization receives nothing from the sale of these digital cards, they were licensed to NFT INC LLC, a company that shows two addresses in Park City, Utah, both in strip malls that don’t seem to show the company in any listings but have UPS stores containing rentable mailboxes.  Not that we are saying anything untoward about the company, only that they don’t seem to be well known.  That said, NFT Inc LLC has licensed what we assume are the rights to Trumps image from CIC Digital LLC, aka CIC Ventures LLC, a company set up last year that has the same address as Trump’s Golf Course and is run by Nick Luna, Trump’s former White House Trip Director, and John Marion, one of Trump’s former lawyers.
All in, this is obviously a deal sanctioned by the former President, who is the ultimate beneficiary of the licensing fees, and likely other incentives (perhaps the 1,000 NFTs that are held from the sale?), and while Trump has mentioned his dislike for the crypto world on occasion, Melania Trump’s NFT collection might have pushed him toward this release.  Based on what we can see on Opensea, the most recent sale was of card #28389, which sold for $398.88, while most of the other (many) listings in the $200 - $250 range.  We took a few samples from the collection as shown below.
It is hard to make any comment about this exciting glimpse into the mind of a former President of the United States, but it does give historians another way to illustrate what life was like during the Trump administration and could serve to remind us of how the former President views himself.  While it is certainly entertaining to see the levels of embarrassment that the former leader of the US can bring to himself while not being embarrassed himself, but it does little to help the image of the US as a leader among Democratic nations.  JOHO.
 

https://twitter.com/i/status/1603442427473571841
​

Back in the 1950s and 1960s a theater critic named Martin Esslin came up with the term ‘The Theatre of the Absurd’ which was a moniker for plays that dealt with the philosophy of Albert Camus and how the life of human beings is a series of circumstances that put them in ‘hopeless’ situations that force them into meaningless actions.  While this sounds depressing and painful, many of the plays associated with the Theatre of the Absurd were comedies, pointing out the ‘grin and bear it’ view of the human condition.
But Esslin and ToA playwrights like Ionesco and Beckett could not have come up with a more absurdist plot like the one that played out in the High Court of Singapore this month between Janesh Rajkumar and “Chefpierre”, a person of unknown name or location.  The lawsuit defines NFTs as ‘property’ under Singapore law, which justified the court’s recent injunction against the sale of a piece of NFT art, part of the collection known as “Bored Ape Yacht Club” that are well-known collector’s items in the NFT space.  Prices for some of the ~10,000 cartoon monkeys in the collection have reached ~$150,000, with investors such as Justin Bieber, Madonna, Mark Cuban, and Shaquille O’Neal creating an unusually robust market for the drawings, each of which are promoted as being ‘the only one of its kind in existence’.  The item that is the basis for the lawsuit (Figure 3) is said to have the following ‘special’ characteristics:

• A “jovial mouth” – A trait only 3% of the items in the collection can claim
• “Red Fur” – A trait which only 5% of the items in the collection had.
• A “beanie hat” – A trait which only 6% of the items in the collection sported.
• “Bored Eyes” – a trait which only 17% of the collection could claim.
• A “Purple Background” – which only 13% of the items had.

…and (our favorite)…

• It was a “virgin ape”, which in the court document was defined as not having been “fed with any mutant serum”, which, if fed, would have created a mutated version of the original ape, according to the claimant’s affidavit.

But wait, there’s more…

The claimant acquired the NFT on August 6, 2021 on the OpenSea (pvt) platform for 15.99 ETH, which we calculate was $46,226.13 (based on closing price) from ‘victorjia_eth”.  The claimant used the purchased NFT as collateral for loans to buy other NFTs, being careful to use only highly ranked lenders on the NFTfi (pvt) system, a platform designed to match NFT users with cryptocurrency lenders.  Janesh was careful to specify that the NFT would be held in an NFTfi escrow account until the debt was repaid and that if the repayment was not made on time, he would inform the lender and reasonable extensions could be given, also adding that at no time would the lender utilize the ‘foreclosure’ option on the NFT without first granting the claimant reasonable opportunities to make full repayment and retrieve the NFT from escrow.
As Janesh had used the same criteria for other loans using the NFT above, all of which were paid back in time, he thought there would be no problem when he asked a new lender (chiefpierre.eth) to make a loan for 45 ETH ($153,828.45) on January 6, 2022 for 90 days at 33% interest/yr.  The lender agreed to the terms, including the non-foreclosure option and on March 18, 2022 the lender agreed to another loan for ~$150,000 for 30 days at 45% interest.  When the claimant informed the lender on April 17 that he would need a short extension to pay back the March loan, the lender agreed and reassured him that the NFT would be returned to him once the loan was paid in full.  A few days later, when the claimant informed the lender that he had contacted another entity who would grant him a loan to pay back “chefpierre.eth”, the chief decided to offer a refinance roll-up that would provide fresh funds to Janesh and deduct the outstanding loan.
That said, as one might guess, “chiefpierre.eth” changed his mind and informed Janesh that he must pay the loan back in full by April 22 or he would exercise the foreclosure option on NFTfi,  Janesh was caught without ample time to find alternative financing, and the chief exercised the foreclosure option and moved the NFT from escrow into his account.  While Janesh was ‘devastated’ he assumed that the lender would return the NFT when full payment was made and made a partial payment, but the chief no longer would discuss the matter, returned the partial payment and stopped the platform from accepting any other payments.  Subsequently the NFT was listed for sale on Opensea and had a number of offers from potential buyers pushing the claimant to file a suit, including an injunction against the sale of the NFT.
The court agreed to the fact that the claimant was a Singapore citizen and effected the purchase in Singapore, giving it dominion over the suit, which was extremely important as if the court did not agree that it had jurisdiction, there was no other court that could rule, given that the NFT itself is held in the Ethereum blockchain, a network of computers across the world.  But there was also the fact that the defendant’s (chiefpierre.eth) actual name and location were unknown.  The ruling cited a precedent that stated that the defendant was not required to be specifically named, allowing the proceedings to continue, and also agreed that there was a ‘serious matter to be tried’, a requirement for the injunction. That said, the question remained as to whether the NFT itself was able to ‘give rise to proprietary rights’ as the NFT is really just information which would have questionable rights, but the court saw the NFT as ‘data encoded in a certain manner and securely stored on a blockchain ledger’, and ruled that the NFT did carry the right to be considered property and not just data.
The absurdity comes from a number of points here, the first of which is why some folks consider 10,000 cartoons of apes valuable, but we know the obvious answer is that they consider it valuable only because someone else says so, and there is the possibility that said ‘other’ person might be willing to buy it.  Flashing the names of celebrities in front of people who are unable to control their emotions is certainly a way for some to make money collecting fees and interest, but we have to fall back on the old adage that ‘beauty is in the eye of the beholder’, so if someone finds cartoons of apes beautiful or in some way valuable, it’s their money and they should not be limited in what they want to do with it, no more than the purchase of a Rolls Boat Tail should be limited. 
However, when it comes to defining property under the law the answers about whether a string of numbers that is spread across the globe is property is going to take years to define, and while we commend the Singapore courts for its efforts to define said NFT, we know only one group that is guaranteed to make money on NFTs and that is lawyers who we expect will be arguing for or against whatever NFT questions hit the courts all over the world.  Will there be a unified answer that will stand the test of time?  We doubt it, so for now it all seems like we remain a member of the cast of the Theatre of the Absurd, searching for meaning in the incomprehensible universe of NFTs and cryptocurrencies.

NFTs are an enigma to most everyday folks and even in the most elite technology circles definition vary considerably and we will not attempt to add our voice to such definitions, but we can at least give investors a bit of understanding as to what the NFT world looks like and potentially what purpose it serves, although the latter is the more difficult question to answer.  Non-Fungible Tokens are a big business, and the platforms on which they are bought and sold have hundreds of thousands of registered and active participants, but it is difficult to gain insight into who these customers are and their motivation for involving themselves in this somewhat arcane world.

While one might assume that NFT traders are a sophisticated and erudite lot, living in full-floor penthouses high above major cities or sitting on the veranda of a beachside mansion in Bermuda, but that is not always the case.  In fact the country that has the largest number of NFT users has a GNI/capita of only $7,040 but an NFT user penetration rate of 8.08%, far above the US penetration rate of 1.14%.  That country is Thailand, where NFT virtual land sales can give Thailanders a chance to become owners of a piece of ‘virtual Bangkok’ (40m x 40m) for a mere $3 or where you can buy collectible cards from the Miss Universe Thailand pageant, the winner of which was given prizes in both cryptocurrencies and NFTs, all of this despite the Thai government’s ban on NFT trading.
Much of the interest in NFTs in Southeast Asia has come from Axie Infinity, a game developed in Vietnam that allows players to earn Smooth Love Potions (SLPs) the more they play the game, which can be converted into Etherium and sold, which became a way for serious gamers to put food on the table during COVID lockdowns, and the concept of digital tokens appreciating in value was a quick step toward NFTs, particularly when the value of early art-based NFTs soared, with collectibles and art generating almost 80% of NFT market value at the end of last year.  We are not saying NFTs look like a get-rich-quick proposition to those in less wealthy countries as the inclusion of the US, Canada, and Germany in the top 10 debunks that concept, but one wonders why some would be willing to risk government wrath and potential financial loss unless there was the promise of a pot of gold at the end of the rainbow, although when you look at Figure 3, which shows the average ‘gas’ price (the fee paid to the platform for any transaction) on Ethereum, there are those who profit with relatively little risk in the NFT/crypto space..

NFTs (Non-Fungible Tokens) are esoteric enough themselves, with most average folks having little understanding of what they are, what they represent, or what value (intrinsic or otherwise) they might have, and while Bitcoin has been around since 2008, NFTs became ‘a thing’ in 2017[1] when Larva Labs (pvt) released “Cyberpunks”, a collection of “unique collectible characters” on Ethereum, which became the basis for standard used today for most digital art and collectibles.  Billions of dollars (actual currency) have been spent on NFTs since then for a wide variety of items no longer limited to relatively primitive digital artwork, with music, game items, sports items, fashion, and real estate, but how do collectors know whether the items they are buying are ‘real’? (Real here does not mean physical but real in the sense that they are unique and owned by the seller)
A new start-up (2022) has just raised $1m in a pre-seed round including a number of VCs and Angel investors that can help NFT collectors better value potential NFT purchases by evaluating a variety of metrics and giving the particular item a “Mint Grade”, similar to the Numismatic Guaranty Corporation that has been grading collectible coins since 1987, or in the vernacular, a ‘CarFax (SPG)’, or Zillow (Z) ‘Zestimate’ for NFTs.  FungyProof (pvt) gives the collector the ability to check a potential purchase or existing asset through the company’s software that evaluates blockchain and image metrics such as “Does the Metadata conform to applicable schema standards?” or “Does the Contract contain no permissions/backdoors and has ownership been relinquished?”
While we are relatively technology savvy, some of the metrics involved are so particular to the blockchain that they become almost meaningless (‘energy of token transfers’, ‘Metadata storage does not cause bloat to underlying blockchain’, etc.), but they all contribute to the items ‘score’ as shown in the Figure 3 demo.  A number of the metrics involved are shown, and whether they meet the FungyProof rubric scorecard requirements, even though we expect the weighting of those characteristics will remain hidden, although the basic characteristics for an “A” or an “F” grade are as indicated below:

“A” Grade

Highly interoperable contract
No back-doors or security vulnerabilities in contract
Assets and metadata are formatted well
Asset gateways have redundancy, low latency, browser compatibility
Distributed storage used for assets and metadata
Low minting and deployment energy use (kWH)
 
“F” Grade

Non-standard or not supported contract
Vulnerabilities exist
Asset and/or metadata missing
Gateways are broken
Broken storage
High minting and deployment energy use (kWH)
 
While this is a very new company that evaluates another relatively new asset class, it is indicative of the new world that is developing behind the often hyped Metaverse and Cryptocurrency products that have captured the minds and dollars of millennials across the globe.  Whether this turns out to be just another form of ‘beanie babies’ (1986), ‘Furbies’ (1998), or ‘lava lamps’ (1963) is certainly open to speculation, but there is no doubt that there is money to be made supporting NFTs as shown above, and we have trouble keeping track of the funding that is going toward NFT support companies which seem to be popping up on a daily basis.. 
​
With company goals as simple as ‘…aiming to launch multimillion dollar NFT projects…” closing seed rounds in days, anyone who has marketing or blockchain coding experience is suddenly becoming the CEO of a new NFT related start-up and celebrities are helping to fuel the fire under these potential companies by lending their names and images to promotional efforts, usually for a fee or a share of the company.  We don’t judge whether this is a good or bad thing, but we certainly understand that NFT valuation is not only emotional but also subject to little or no regulation and therefore become a wellspring for abuse and fraud.  It is a positive that companies like FungyProof are making their services available to NFT collectors, but until there is an agreed upon basis for evaluation, all evaluations are subjective. 


[1] Disputed by some who believe Kevin McCoy & Anil Dash created the first NFT in 2014.

A Chinese court in Hangzhou ruled that the responsibility for guaranteeing the ownership of assets sold on NFT marketplaces resides with the marketplace itself. The ruling was the result of a suit by Shenzhen Qice Diechu Cultural & Creative Co. (pvt) against Yuanyuzhou Company’s (pvt) subsidiary “Bigverse” over artwork created by Chinese artist Bu2ma, as Qice owns the artwork and not the seller on the Bigverse site.  The suit alleged that the site did not take necessary steps to ‘disallow and remove’ fake NFT’s that were placed on the site and caused the ‘uniqueness’ of the items to be lost.  While the monitory damages sought were $1.6m, the court ruling only awarded $612 to the plaintiffs, however the ruling cemented the idea that anything that affected the consumer’s trust that NFTs were unique would undermine the industry’s business model and would therefore violate copyright law.  The defendants argued (unsuccessfully) that since it is a 3rd party platform and the works are uploaded directly by the platform user, it should not be held responsible and performs a ‘post review’ at which point it can delete transaction notifications.  Since NFTs operate through blockchains, they cannot be completely deleted from all nodes and enter a ‘black hole’ when there is suspicion of an illegal transfer.
With Alibab’s (BABA) NFT marketplace (Topnode) having more than 700,000 active users and over 4.5m NFT sold last year in China, there has been considerable controversy both by the Chinese government, who has warned consumers to be wary of fakes, fees and other dishonest practices, while NFT marketplaces that sell everything from digital art to virtual land have been popping up everywhere.  In the above case, the platform charges what it calls a ‘fuel cost’ for purchasers to use the platform (non-refundable) and also receives a 5% fee on the sale of items (10% to list), along with another $33 “gas fee” and a 2.5% ‘writer’s royalty’, and there is no limit on the value of NFT’s sold, with some artwork sold at over $15m US.

Jay Chou is a 43 year old singer, songwriter, rapper, director, producer, actor, television personality, and strangely magician who has been releasing album since 2000, has performed for more than 10m during tours, and starred in the Green Hornet in 2011.  As many Taiwanese recording and film stars seem to do, Chou collects artwork which he purchases using NFT’s (Non-fungible tokens), which protect the one of a kind artwork from being copied and sold as original.
Unfortunately it doesn’t protect art collectors from being ‘phished’ by sophisticated hackers who offer giveaway promotions on Instagram or other social media sites.  Mr.Chou made the mistake of clicking on one such offer only to find that his personal NFT worth $550,000 and three other valuable NFT artworks had been removed from his account, with the likely culprit being software loaded into his system by clicking on the free offer.  Mr. Chou first thought that the missing art was an April Fool’s joke but when the source of one piece of his art posted that they also had been hacked he realized it was no joke and the tokens were truly gone.
There are two questions here, first, why would one expect a free offer of anything? And second why would one collect what was stolen? (see below), but our is not to reason why, just to note how many hacks, scams, swindles, and flimflams (Thank you President Biden) take place every day relating to cryptocurrencies and NFTs, and the ones that make it into the press or even the technical press are likely just a subset of what actually occurs, as many would rather not see their names associated with such issues.  For what has been touted as a secure way to buy and sell ‘things’, the definition of secure seems a bit flimsy.

In our note yesterday (“Phishing for NFT’s”) we mentioned some of the potential risks facing those who participate in the NFT ‘Art’ market, particularly in China where government warnings and likely intervention seem to have little effect on NFT enthusiasm.  Proof of how ‘enthusiastic’ NFT investors are in China comes today with buyers on OpenSea (pvt) snapping up an entire collection (1,000) of what were obviously crudely drawn facial sketches posted by the “Domestically Made Conscience NFT Project”, that were listed as ‘specifically prepared for Chinese people’ with the assurance that the team behind the project ‘will not scam their fellow countrymen’, despite the project’s sole purpose being to ‘sell pictures’.
It seems that the items are now trading on OpenSea at a value of ~$537,000, while the developers have warned that they are thinking of taking the money they made and closing the project.  It seems that the whole concept was to satirize the idea that almost anything can have value in the virtual world given that the sketches could be drawn by almost anyone with a few hours of art class or cartooning instruction, which went a bit more viral than expected, and while those who bought the original collection will still need to sell them before they can actually receive value for their speculation, after paying fees and conversion costs, it does point to how the virtual world is akin to 3 Card Monte, a popular NYC con around the 1980’s where the dealer used shills to excite marks into a game that was rigged and impossible to win.  While NFT related headlines and endorsements from influencers and celebrities are acting as NFT shills, there is a point at which either the cops come and break up the game or somebody points to the fact that the emperor has no clothes.

When anyone over 30 mentions ‘NFTs’ to a younger person, they tend to get a look of scorn or pity, with the assumption that the younger generation is hip to all that is blockchain, crypto, and Metaversey, but that is not always the case and in China, where the government’s efforts to slow or stifle the growth of cryptocurrencies and similar virtual financial products have met with modest success, even the younger generation is getting caught up in the new “Wild West” of the virtual world.
It seems that Niq Chen, a senior at Tongli University in Shanghai, told a group on Discord (pvt) that he had lost an NFT ‘object’ worth ~$48,000 through a scam.  While the government has banned cryptocurrency trading and mining, the idea that one can get rich quickly with little physical effort seems to be appealing to those who are willing to chance the use of virtual currency and NFTs on platforms outside of China, such as OpenSea (pvt), which is not available on the Mainland.  The platform is a repository for virtual collectibles, particularly artwork and ‘other stuff’ that can be viewed and purchased using virtual currency and NFTs. 
While the site is careful to provide a list of partnered ‘wallet’ companies, a talented scam artist could spoof an e-mail to exhibitors or collectors, which is what happened to young Mr. Chen, who fell prey to such a scam and lost a good chunk of his NFT assets.  He even tried to convince the buyer of his NFT that it was sold illegally and tried to buy it back, but the new holder refused saying that he did not want to lose the asset after getting such a good deal.  Since the entire transaction, illegal or not, was done across blockchain, there is no way to change or cancel the transaction, nor did the buyer believe he did anything wrong, having purchased the asset at a discount, albeit from an illegitimate source.  Hopefully the fact that OpenSea has frozen the asset while investigating will convince the new owner that it might be in his best interests to sell back the asset at cost.
One might expect that Mr. Chen would walk away from such an experience with an attitude that might preclude his expansion in the NFT world, but it seems not, as he has proclaimed that he will continue to pursue NFT art as a career path and states “I already cannot do without the community,” which would give a hint as to the real basis for such investing is in this case, companionship, with Discord having upwards of 150m monthly users.  Mr. Chen is not alone in his partial misery, as only a week ago, 17 OpenSea users had NFT assets stolen in a similar phishing attack, netting the scammer ~$1.7m in Etherium crypto from the items that he has already sold and there have been numerous other scams that seem legitimate, but move assets out of their digital wallets to disappear into the ether. 
A number of countries police crypto and NFT transactions to look for money laundering, which is ripe for abuse, but there are very few rules about crypto-fraud and we are constantly hearing of scammers who buy investor lists and call to promise a quick return on their investments and disappear with the proceeds after investments are made.  This is still the very ‘Wild West’ and being such, even those who profess to be hip to crypto-jargon and the ways of NFTs are getting caught up in the scammers net, just like the old timers who used to buy penny stocks over the phone.  The virtual world is shiny and new but has the same dark underbelly that “Mary from Amazon” touches on when she wants to make sure you actually purchased that iPhone 12, or the guy from “Credit Services” needs to ‘confirm’ your credit card account number.  “There is no free lunch”[1]


[1] “The Moon is a Harsh Mistress” – Robert A. Heinlein  - 6/2/1966