On Friday, Lacoste closed the social network of the NFT UNDW3 project and the community reacted by accusing the company of scam. Furthermore, a rugpull of 1,000 ETH is assumed.
The NFT project of Lacoste and the accusations of scam
Lacoste has launched its project based on NFT in 2022.
The market of NFT experienced a real boom in 2021, reaching its peak levels in January 2022. Since then, it has started to implode.
Taking as a reference the then main marketplace, OpenSea, the monthly trades went from 5 billion in January 2022 to 300 million in December of the same year. Subsequently, in 2023 the monthly volumes dropped even below 100 million.
So the Lacoste NFT project was launched in the middle of a bear-market, that is, at a really unfavorable time for this market.
In June of last year they tried to relaunch it, but evidently without success.
And so at the beginning of August, they announced the end of the UNDW3 NFT collections, and last week they closed all social channels.
The UNDW3 collection
UNDW3 is the first collection of NFT by Lacoste.
On OpenSea, there appear to be more than 11,000 NFTs from both the UNDW3 Card collection, launched in June 2022, and the UNDW3: The Emerge collection launched last year.
The trading volumes on OpenSea for the first collection have plummeted from 2,300 ETH weekly at launch to the current 0.03 ETH, while those for the second have dropped from 22 to 0.04 ETH.
Moreover, after the initial boom, which lasted only a few months in both cases, there was a continuous decline that makes the colossal loss of market interest in these products evident.
The company promised holders exclusive access to the brand’s events, but in the end, the project was instead closed.
It is not precisely known how much the company has earned from the sale of these NFTs, but considering that there are two collections of 11,000 NFTs each, and with a total trading volume on OpenSea exceeding 4,000 ETH, the total revenue should not have been very low.
The accusations of scam against the NFT project of Lacoste
The company had also promised at some point to be working on a new use case for these NFTs related to creation and gaming, thus trying to reassure the fans.
They declared that the project was actually not finished, but was evolving into a broader initiative aimed at offering a more inclusive and accessible experience for all enthusiasts of the brand.
And instead, in fact, it has been closed, for now.
Even the official website undw3.lacoste.com now appears to be offline.
At this point, some holders of those NFTs have started to accuse the company of fraud.
1/3 🧶I hope someone with the expertise will investigate the Soft Rug by @Lacoste with @undw3_lacoste. They reportedly siphoned around 1000 ETH from the crypto market with their 2022 mint, delivering only a minimal product while promising much more. pic.twitter.com/7R9Jk0EAnW
— Le crêpiste (@LeCrepiste) August 29, 2024
The hypothesis is that with this initiative they collected about 1,000 ETH in 2022, and then, once collected, they simply lost interest in the project.
They are in fact accused of having rugpulled 1,000 Ethereum (ETH) with a sort of soft rug.
The hypothesis of fraud
For now, there does not seem to be any criminal complaint against the company.
Furthermore, even in the case where the NFTs they placed on the market have lost all their value, or almost, they might also not be considered guilty of having committed any crime.
However, there are those who believe that this behavior should be considered fraudulent.
On one side, there is a company that sells a product whose market value is not necessarily destined to either increase or be preserved over time. On the other, there are people who buy it hoping it will gain value over time, and who then simply realize they have bet on the wrong horse.
It should be remembered that if Lacoste had promised to increase the market value of those NFTs over time, it would have effectively sold an unregistered security, so it most likely did not do so. Therefore, it may not have any legal obligation in this regard.
The investigations
As of today, it does not appear that there is any authority investigating this matter.
This does not necessarily mean that no authority has set its sights on it, but only that for now it does not seem that the company is at risk of anything.
However, the community is investigating, which nevertheless has limited means in this regard. In fact, it can only use public information and cannot, for example, compel the company to disclose precise and complete data.
What emerges, however, is that it is unlikely that the company did not know that the NFTs it sold, probably collecting at least 1,000 ETH, could have depreciated over time, but despite this, it continued to sell and promote them as long as it was convenient. Later, it got tired of doing so and simply stopped, not caring about the losses accumulated by the owners of those NFTs.
For now, it cannot be stated that there is anything illegal in all this, but it can certainly be stated that those who believed that those NFTs would appreciate over time were greatly mistaken. At this point, even those who believed they could be useful for something were greatly mistaken, although it is not yet entirely certain that the UNDW3 project is definitively over.