Why is This Company Intentionally Building "The World’s Largest Collection of Worthless NFTs"?

Tax-Loss Harvesting Platform Unsellable is Building ‘The World’s Largest Collection of Worthless NFTs'

After the boom of 2021, the hype that fueled non-fungible token (NFT) trading has subsided. Cryptocurrency prices have plummeted from their former highs and mainstream interest in digital collectibles has waned, bringing down NFT prices.

But the extended crypto winter has come with a potential silver lining – tax-loss harvesting, where NFT enthusiasts can sell their no longer valuable JPEGs and claim losses to offset their tax bill.

Enter Unsellable, a platform launched last month that acquires “worthless” NFTs for the cost of gas plus a few bucks. The site functions as instant liquidity for otherwise, as the name suggests, unsellable NFTs, providing a quick way for NFT investors to capture their losses.

“Think of us as Web3 junk removal,” it says on the website. At the time of writing, the service has so far purchased over 9,300 NFTs, according to Etherscan.

FTX Scandal: Crypto Accountants and Lawyers Failed to Sound Alarm

“Where were the lawyers and accountants?” That was the withering assessment of one US judge after years of fraud and deception went undetected during the 1980s savings and loan crisis, despite a well-stocked entourage of audit, legal and compliance professionals who might have been expected to raise the alarm.

It’s a relevant question once more as watchdogs try to crack down on a largely offshore and patchily-regulated cryptocurrency industry — worth $3 trillion at the peak — and as Binance and other platforms try to draw a line under the FTX scandal by appealing to the credibility of outside advisors. Wall Street’s top regulator is warning investors to be “wary” of how crypto firms promote the often narrow work done by accounting firms and is considering enforcement actions, according to the WSJ.

How Not to Play the Game

Over the last few years crypto built a toy financial system. That was an accomplishment, both in a technical sense (crypto found smart ways to do financial trading) and a social one (crypto attracted a lot of smart finance people). It is an accomplishment that I personally appreciate, since I love a clever financial system. But it is in important ways a bad place to start. A cleverly designed exchange for trading magic beans will never get around the basic problem that the magic beans don’t work, and people might stop believing in them. If crypto is going to work in the long run, it will need to prove its real usefulness outside of finance. Finding new ways to trade the tokens is fun, but it is not enough; the tokens have to mean something, too.

Winklevoss twins sued by Gemini investors over crypto crisisThe Winklevoss twins and their embattled cryptocurrency site Gemini were slapped with a potential class action lawsuit this week from a pair of disgruntled investors who accused them of fraud and other violations.

The complaint filed by investors Brendan Picha and Max J. Hastings alleges that Cameron and Tyler Winklevoss sold interest-bearing accounts on Gemini without registering them as securities and fully alerting customers of the potential risks.

Gemini is scrambling to recover $900 million in customer funds held by its lending partner on the interest-bearing accounts, Genesis, which faced a liquidity crisis due to what it described as “unprecedented market turmoil” related to FTX’s collapse.

Bahamian regulator holding $3.5 billion of FTX customer assets

The Securities Commission of the Bahamas has been holding on to more than $3.5 billion worth of FTX customer assets since Nov. 12, according to a statement from the regulator released late on Thursday.

The decision to take custody of the funds, specifically from the crypto exchange’s FTX Digital Markets Ltd, followed security concerns. Hours after the collapsed crypto exchange filed for bankruptcy protection, between $370 million and $400 million in crypto assets were stolen from the exchange’s wallets. The hack is currently under investigation by the U.S. Department of Justice.

The funds are stored on “digital wallets controlled by the Commission, for safekeeping,” the Commission wrote in the statement. The assets will remain in the Commission’s control until the Bahamas Supreme Court orders their return to FTX customers and creditors.

Crypto Customers Sell Claims at a Loss to Avoid Bankruptcy Wait

At least hundreds of customers burned by the collapses of FTX, Celsius Network LLC and Voyager Digital Ltd. are seeking to sell their cryptocurrency claims at deep discounts so they don’t have to wait months or even years to see what they might recover as the platforms move through chapter 11.

Customers and other creditors holding roughly $1 billion in FTX claims and about $100 million in Celsius claims have expressed interest in selling them through an online market run by Cherokee Acquisition, a bankruptcy claims broker and buyer, the firm said.

Nearly 500 users of FTX, Celsius and Voyager have posted claims valued at roughly $126 million for sale on Xclaim Inc., a bankruptcy claims trading startup that recently changed its business to focus on providing a platform to buy and sell crypto claims. Xclaim has so far listed roughly $91.7 million in FTX customer claims, the company said.