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Ethereum NFT Fraud Fame Lady Squad: ‘Sorry for the Lie’

The popular project’s creators lied about their gender. Following a backlash from collectors, they’ve now relinquished control.

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The crypto industry’s pseudonymous structure can make it impossible to know where projects come from properly—and to trust who’s behind them—as the market for NFT digital artifacts grows. For example, many NFT collectors learned the hard way this week when the developers of a well-known women-centric project acknowledged lying about their gender.

According to its Twitter page, Fame Lady Squad (FLS) is an Ethereum-based NFT collection that began in July and claims to be the “first female avatar project of all time.”

The Fame Lady Squad NFTs, allegedly made by a trio of women named Cindy, Kelda, and Andrea, were swiftly minted and picked up by collectors. A passionate fan base grew up around the project, and secondary market prices began to rise.

Even investor and social media influencer Gary Vaynerchuk—an NFT inventor and new owner of a $3.7 million CryptoPunk NFT—spoke out in support of Fame Lady Squad on Twitter. In addition, the idea was featured in a recent article in The New Yorker. So fame Lady Squad appeared to be prepared to continue gaining popularity, despite a recent increase in NFT market trade activity.

However, in recent days, doubts about the Fame Lady Squad project’s origins have grown louder. Twitter sleuths like @FedorLinnik, @dearesthaley, and @NFT Marty provided extensive Twitter threads connecting the dots between several recent NFT collectibles projects, like Cyber City Girls Club and Unicorn GG Club, that appeared to come from the same source or share creators.

Pranksy, a well-known NFT collector, said on Tuesday that after purchasing a Cyber City NFT, they “failed to perform my own research adequately” and that it was “created by a dev team that seems to be churning out a new project daily.”

“The questions here are what actually makes a [profile picture] project valuable?” Pranksy asked, adding that the crew had been “so brash” about promoting its next project, Unicorn GG Club. Are the development team, the community, and the time it took to create it worth it?”

While they are valid considerations for NFT collectors to consider, the Twitter allegations progressively pointed to project creators providing incorrect information. For example, FedorLinnik, a developer behind several crypto ventures, claimed the evidence led to a gang of Russian guys who were “mining new NFT projects like a conveyor” this spring. Instead, they seemed to be behind Fame Lady Squad as well as the other new enterprises.

Coming Clean

Although the developers of Fame Lady Squad first resisted, citing “false accusations” and claiming rivalry from competitor NFT designers, they later dropped the ruse under mounting criticism from the collector community.

Max Rand, a developer, tweeted on Tuesday that he was one of the persons behind the Fame Lady Squad and other initiatives, along with a couple of collaborators: D Mefi, who had his Twitter account briefly removed, and another unknown associate. Rand tweeted, “Sorry for the lie.  I was hesitant to say this because of [a] lot of threats on my side, my stupidity, and my lack of grasp of US market culture rules,” says the author.

The official Twitter account of the Fame Lady Squad went even further with its explanation. “Let’s be clear: Fame Lady Squad was built by a male crew, and we apologize for not disclosing this earlier. But that doesn’t mean it’s a ruse or a fraud,” the team wrote on Twitter. “We saw that there are very few female-led projects in the space. And, because we are fascinated by women’s strength, we were able to complete this successful project.”

Meanwhile, in a tweet thread, the Cyber City Girls Club NFT project—which was previously credited to a pair of Asian-American women developers—explained its own fraud.

The tweet thread began, “Sorry to everyone who had invested into our idea because it was made only by two Asian women. CCGC was founded by a group of six people, only two of whom were female. But, we’ll extend the plan and provide holders greater value. Good night!” says the narrator.

Even though the Unicorn GG Club NFT project didn’t have the same kind of significant false representation issue at its heart, the development team—including Rand and D Mefi—decided to halt sales of NFTs in the wake of the larger scandal. “I’m not trying to get away; I’m simply clearing my mind,” co-creator “Trible Penguin” tweeted from the official account. “We don’t do [expletive] rug pulls Memecoin, but I’m terrified of the bullying. So I apologize for the delay.”

The Queenship NFT project, which displays images of Black women and was reportedly made by Black women, has yet to be authenticated by the same developers. The Legendary Lady Squad Rand denied his role after Twitter rejected the connection earlier this week. The Queenship website is no longer accessible, and the project’s most recent tweets from Monday raged against rumors about its origins.

Following a recent giveaway promotion, the team behind NFT Project Bulls On the Block—which some Twitter sleuths suspected was also affiliated with the same developers—denied any relationship with the FLS founders.

A Change of Plans

To put it mildly, it’s a disaster. Collectors who bought NFTs from the Fame Lady Squad, in particular, believe they were tricked into thinking they were investing in a project made by and for an under-represented group in the crypto industry. As a result, collectors sought to panic-sell their FLS NFTs on the secondary market OpenSea yesterday, fearing waning demand amidst what appears to be an impossible road forward for the project.

The creators of Fame Lady Squad, on their part, are attempting to make amends in the form of money. Rand said that he and his partners will create a $100,000 grant fund to assist new NFT projects and artists and that it will start “soon” in “a few days,” according to Decrypt. Unicorn GG also stated that it had donated 5 ETH (about $15,700) to the Virunga National Park in the Democratic Republic of the Congo, using an Etherscan link as proof.

Disturbed by yesterday’s disclosures and the circulating charges in the days before, several prominent members of the Fame Lady Squad community began advocating for a different kind of settlement to give the project a future. In response to Rand’s confession tweet on Tuesday, noted NFT collector Artchick outlined a possible path forward.

“This is over for you,” Artchick told Rand. “If you want to do the right thing, I can broker a deal where you hand over control of your smart contract, and holders of FLS NFTs have a chance to recoup their losses and potentially thrive. After that, put the contract in the hands of the community.”

That is precisely what occurred. After submitting the matter to a Twitter vote, the Fame Lady Squad developers gave her control of the NFT project’s smart contract. Artchick then passed the contract on to “Bored Becky,” a notable FLS community member who will oversee the project with the help of other FLS members.

The developers will no longer profit from secondary sales, according to Artchick’s tweets.

When asked why his team relinquished ownership of Fame Lady Squad, Rand stated, “Because the community wanted it,” smiling. D Mefi, a co-creator, responded to a tweet defending his team’s conduct today, saying, “We didn’t screw anyone. Instead, we built a project that helped many people while also introducing many new people to the place. I understand your dissatisfaction; we apologized for our error and made good decisions to allow FLS to grow once more.”

Collectors applauded the action, and community members immediately began discussing the new road forward after secondary market prices for the NFTs soared back above levels observed before the team’s confession. However, no equivalent intentions for transferring control of the connected NFT initiatives have been revealed.

After such upsetting revelations, the Fame Lady Squad community appears to have found a happy resolution. However, it’s uncertain whether the recently established Cyber City Girls Club project can recover following this week’s news: NFTs are trading for about 0.01 ETH (about $32) on OpenSea, compared to a floor of 0.13 (roughly $420) for FLS collectibles.

Pranksy’s aforementioned tweet explored what made NFT avatar collections valuable, and as this case indicates, the claimed genesis narrative and the perceived value of artwork can be linked. Of course, it’s a subjective thing, but when that worth is built on fabrications—which isn’t helped by the anonymity of crypto—investors might be tricked and end up with NFTs that have lost a lot of their predicted value.

Not every story like this will have a happy ending.

NFT

Could this trademark application indicate that PayPal is developing an NFT market? 

A trademark application for blockchain and cryptocurrency technology has been submitted by PayPal. Some claim that the file has something to do with Web3 and the metaverse, although it may be tied to an NFT marketplace.

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A recent trademark application by PayPal has been found, and it suggests the development of a service pertaining to several facets of blockchain technology. The file, which was made on October 18, makes a notable allusion to the potential introduction of a non-fungible token (NFT) market.

For its logo, PayPal submitted two trademark applications. The first one concerns “downloadable software” for cryptocurrency trading and storage. The second discusses cryptocurrency-related payment processing services.

Although users may currently buy cryptocurrencies on PayPal’s platform, this filing suggests that there may be more to come. The concept of assets is substantially broader in the filing’s terminology. Mike Kondoudis, a trademark lawyer licensed by the USPTO, claimed on Twitter that this filing relates to NFTs and the metaverse.

Although there is no proof to support this, it would not be shocking if it were true. The finance business would be adding its name to a lengthy list of businesses that are starting to make inroads into the Web3 and metaverse spaces.

PayPal is investing more in cryptocurrency.
Over the past two years, PayPal has intensified its focus on cryptocurrencies. First, the company made a huge announcement for the industry by saying that consumers would be able to purchase cryptocurrency on its platform.

However, it didn’t start enabling users to move those funds into wallets outside of the network until recently. It indicated that it would roll out additional crypto-related features in the latter part of last year. One of those additions might be an NFT marketplace.

It teamed up with Coinbase’s TRUST network more recently. This was viewed by many as an endorsement of the sector. The TRUST network upholds consumer security and privacy while adhering to the banking industry’s Travel Rule.

Increased Criticism of Payment Giant
Additionally, PayPal has been in the spotlight for all the incorrect reasons. The business has recently come under fire for a contentious policy that penalized users for disseminating false information. Later, it claimed that false information was released with the amended policy. Crypto aficionados, however, were eager to point to this as evidence of the value of decentralization.

PayPal established a blockchain and cryptocurrency advisory committee earlier this year. According to the company’s management, working with governments is essential to overcoming obstacles and seizing possibilities.

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NFT

Seba Bank, a cryptocurrency company, aims to store valuable NFTs

Seba Bank, a cryptocurrency company, has launched its first NFT service, a blue-chip NFT-specific institutional-grade, certified, and independently audited hot and cold storage custody product.

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The launch comes in response to requests from customers to keep their NFTs with the bank alongside other crypto assets, such as the already-approved Bored Ape Yacht Club, Cryptopunk, and Clone X NFTs. The bank stated that new collections would be added based on customer demand.

With its newest offering, Seba Bank seeks to entice investors who view NFTs as an asset class and crypto natives. Not your keys, not your bitcoin is a well-known phrase in the crypto sphere, and adherents of this maxim could object to having their Apes or Punks stored with a third-party custodian.

Urs Bernegger, co-head of markets and investment solutions at Seba Bank, however, highlights a growing group of NFT holders who are more at ease handing up their NFTs and private keys to a company.

They don’t want the key because they aren’t even aware of how to handle and store it. He claimed that they’re more concerned with damaging the key than giving it to a bank.

It’s a significant issue. Between 2.3 million and 3.7 million bitcoins, according to Chainalysis, are trapped in inaccessible wallets. Numerous accounts of people have lost millions owing to losing private keys, including Russian officials, students, and engineers. Families have also been prevented from accessing substantial quantities of money following sudden deaths in which wallet owners had not disclosed their private keys.

Bernegger asserts institutional custody can be advantageous for native crypto users as well. There has been an increase in businesses providing services that employ NFTs as collateral for conventional banking services like loans.

Seba Bank is thinking about implementing these features in the future. Based in the crypto-friendly Swiss town of Zug, the four-year-old bank already backs several investing, credit, lending, and staking options for cryptocurrencies and might extend them to NFTs.

“Instead of traveling to the market, for instance, we could create a club for collectors and assist them in finding other collectors. There are a few things we have in mind, but we laid the groundwork by storing NFTs securely at first, “explained he.

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Projects

The NFT album maker for Kings of Leon now includes a metaverse music venue

YellowHeart, a Web3 ticketing startup, is opening a metaverse music venue in an effort to transform how performers, teams, and event organizers distribute tickets and interact with fans.

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The facility, constructed on Spatial, will feature Grammy-nominated blues musician G.Love as its opening act later this year. Fans can communicate with one another, participate in meet-and-greets before and after performances, and use several screens to view what is happening in various areas of the stadium simultaneously.

They will soon be able to order meals and drinks before the event, which will also be available as digital things.

The idea of an online concert has so far primarily been popularized by big gaming companies. The most well-liked virtual competitions have occurred on sites like Fortnite and Roblox. Ariana Grande’s Fortnite concert in August 2021 received 78 million viewers. Next month, Decentraland will host its second Metaverse Music Festival. Over 100 musicians are on the lineup, including well-known performers like Ozzy Osbourne and Soulja Boy.

In addition to throwing an event, YellowHeart, which assisted Kings of Leon in releasing an NFT version of their most recent album, stated that it hoped to accomplish more. It was established in 2017 with the lofty goal of revolutionizing the music ticketing sector as a whole, which has historically been dominated by powerful reselling organizations and exclusive ticketing relationships. These alliances frequently impose limitations on what purchasers can and cannot do with their tickets. Trying to resell a ticket for a concert you can’t go to might be a headache.

YellowHeart believes these issues can be resolved by returning control to artists and fans via web3 technology. Additionally, it may provide advantages that cannot be programmed into conventional tickets.

“These range from complete albums to personalized vinyl records, exclusive merchandise, and immersive visual art. Web3 tickets also allow performers to update fans on new tour dates, music releases, giveaway possibilities, and much more, according to the business.

It has already collaborated with well-known figures, including Julian Lennon, Maroon 5, and MGM Resorts. Contrary to the non-NFT versions offered on Spotify, iTunes, and other platforms, those obtained through YellowHeart entailed particular customer benefits.

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