On Friday, Lacoste closed the social network of the NFT UNDW3 project and the community responded by accusing the company of scamming. Furthermore, a rug pull of 1,000 ETH is assumed.
Lacoste’s NFT project and the fraud allegations
Lacoste has launched its NFT-based project in 2022.
The NFT market really boomed in 2021, reaching its peak level in January 2022. Since then, it has started to implode.
If we take the then main marketplace OpenSea as a reference, monthly transactions increased from 5 billion in January 2022 to 300 million in December of the same year. Subsequently, monthly volumes even fell below 100 million in 2023.
So the Lacoste NFT project was launched in the middle of a bear market, that is, at a very unfavorable time for this market.
They tried to relaunch it last June, but apparently without success.
And so, in early August, they announced the end of the UNDW3 NFT collections, and last week they closed all social channels.
The UNDW3 collection
UNDW3 is Lacoste’s first NFT collection.
On OpenSea, there appear to be over 11,000 NFTs from both the UNDW3 Card Collection, launched in June 2022, and the UNDW3: The Emerge Collection, which launched last year.
Trading volumes on OpenSea for the first collection have dropped from 2,300 ETH per week 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 in both cases lasted only a few months, there was a continued decline, which highlights the colossal loss of market interest in these products.
The company promised holders exclusive access to the brand’s events, but the project was ultimately closed.
It is not known exactly how much the company 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 of over 4,000 ETH, the total revenue would not have been very high should be. low.
The fraud allegations against Lacoste’s NFT project
The company had also at one point promised to work on a new use case for these NFTs related to creation and gaming, to reassure fans.
They stated that the project was not actually finished yet, but was evolving into a broader initiative aimed at providing a more inclusive and accessible experience for all lovers of the brand.
And instead, it’s closed for now.
Even the official website undw3.lacoste.com seems to be offline now.
At this point, some holders of those NFTs have started accusing the company of fraud.
1/3 🧶I hope someone with the expertise will investigate @Lacoste’s soft rug with @undw3_lacoste. They reportedly took around 1000 ETH out of the crypto market with their 2022 coin, delivering only 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 around 1,000 ETH by 2022, and once collected, they simply lost interest in the project.
They are accused of raising 1,000 Ethereum (ETH) with a kind of soft carpet.
The fraud hypothesis
For the time being, there appears to be no criminal complaint against the company.
Moreover, even in the event that the NFTs they put on the market have lost all their value, or almost, they cannot be considered guilty of committing any crime.
However, there are those who believe that this behavior should be considered fraudulent.
On the one hand, there is a company that sells a product whose market value is not necessarily destined to increase or be maintained over time. On the other hand, there are those who buy it in the hope that it will gain value over time, and then simply realize that 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, and thus most likely did not do so. Therefore, there may be no legal obligation in this regard.
The investigations
To date, it appears that there is no authority investigating this matter.
This doesn’t necessarily mean that no authority has their sights set on it, but just that for now it doesn’t seem like the company is in danger of anything.
However, the community does research, but still has limited resources to do so. In fact, it can only use public information and cannot, for example, force the company to disclose accurate and complete data.
What emerges, however, is that it is unlikely that the company was unaware that the NFTs it was selling, which likely yielded at least 1,000 ETH, could have depreciated in value over time, but nevertheless it continued to sell them and promote it as long as it was convenient. Later, it got tired of this and simply stopped, without caring about the losses that the owners of those NFTs had accumulated.
For now, it cannot be said that there is anything illegal about all this, but it can certainly be said that those who believed that these NFTs would be appreciated over time were sorely mistaken. At this point, even those who thought they could be useful for something have been sorely mistaken, although it is not yet entirely certain that the UNDW3 project is finally over.