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Pakko De La Torre // Creative Director

Did De’Aaron Fox really defraud people for $1.5M in an NFT ‘rug pull’ scheme?

Did De’Aaron Fox really defraud people for $1.5M in an NFT ‘rug pull’ scheme?

Sacramento Kings v Chicago Bulls
Photo by Jeff Haynes/NBAE via Getty Images

Sacramento Kings guard De’Aaron Fox is facing some hefty allegations and hundreds of angry investors after pulling the plug on an NFT scheme that raised over $1.5 million since launching in December of 2021. It’s being called a ‘rug pull’ by investors, ostensibly saying Fox schemed to defraud them of their money and never deliver on the promises he laid out when the ‘swipathefox’ NFT project launched.

News began to spread that something was happening with swipathefox on Wednesday when investors noticed all communication had gone dark. The official website is now offline, a Twitter account related to its development was deleted, the community Discord was shut down, and Fox closed replies on his personal Twitter account. It became clear to investors that the project was vanishing, leaving them holding the bag on their investments.

The term ‘rug pull’ is parlance in the crypto space for a project launching, garnering investment, and subsequently being shut down without delivering on its promises. This has happened numerous times before, but rarely if ever with a famous backer like Fox as its head. The original swipathefox project promised giveaways, exclusive chats, gaming opportunities and more — all available to those who purchased one of Fox’s NFTs. However, now two months after its launch, none of those were made available.

Fox responded to the allegations on Thursday, vaguely outlining that the project was causing him a problem — and making nebulous promises that it would return in the future.

“I want to address an NFT project we launched recently. The project launch was ill timed. I delegated certain aspects to the launch of the NFT in an attempt to partner with professionals. We weren’t happy with the execution & demand on my time and attention during the NBA season. This project is about a brand that will continue to grow, but I have obligations that I must fulfill to the Sacramento Kings and their loyal fan base. They deserve all of my attention. As I stated previously, I look forward to doing this again the right way and adding value to my NFT holders. I’m excited to learn from the entire NFT community as well. The project will be updated at the conclusion of the NBA season.”

This statement is cold comfort for those who have already purchased Fox’s NFTs. It’s unclear whether they will be reimbursed for their investment, or included in this new project Fox is saying will be done “the right way.” It’s understandably left investors angry, and demanding answers.

There are lingering questions whether this truly was a “rug pull,” or as Fox suggests, simply an ill-planned venture gone awry. To complicate matters, there’s absolutely no legal recourse these investors have. Unlike traditional securities, crypto and NFTs are not subject to the oversight and protections offered by the Securities and Exchange Commission. It’s essentially the wild west of decentralized finance, and while the allure of these projects is being able to operate without oversight, it also can come back to bite investors when a project lead decides to go dark.

It’s all a mess. There are no clear answers, and Fox didn’t do anything Thursday to clear up the damage left in the wake of the NFT project.

This content was originally published here.