Australian crypto influencer and Nuggets News founder Alex Saunders is facing backlash over his non-fungible token (NFT) sale from late last year.
Nuggets News is a paid group providing technical analysis and crypto tips to subscribers that was founded by Saunders in 2017. As of Aug.17, Nuggets News had roughly 146,000 subscribers on YouTube.
In November 2020, Saunders minted 100 NFTs comprising tokenized tickets he said would grant holders access to an exclusive Nuggets News community headquarters being developed in the crypto-powered virtual metaverse, Decentraland.
Saunders priced the NFTs at 1 ETH each, worth around $570 at the time. Saunders reportedly sold all NFTs within weeks of the drop, accumulating $57,000 from his supporters in total. At today’s prices, 100 ETH is worth roughly $315,000.
In a post to Saunders’ subscription-based Facebook group, the influencer touted the virtual headquarters as “an educational, collaborative workspace in virtual reality” fitted out with “professional offices” and even a function center.
According to an Aug.16 report from the Australian Financial Review (AFR), Saunders has so far failed to pay blockchain development studio, Polygonal Mind, for building the virtual headquarters.
Despite Saunders taking in $57,000 from his supporters, Polygonal Mind reportedly quoted the influencer less than 10,000 Australian dollars ($7,300) to complete the project.
Polygonal Mind CEO, Daniel Garcia, claimsthat Saunders pushed back the project’s launch date multiple times despite the virtual headquarters having been fully built. After learning about Saunders’ alleged financial mishaps, Garcia told AFR he decided to write the project off:
“When we learned of all these other problems Alex has been having, we have drawn a line under this one and let it go. We don’t want to be associated with this kind of activity.”
“I believe he could have made a lot of money running this legitimate business, so why all this shady stuff?” Garcia added.
An anonymous investor told AFR they are considering taking legal action against Saunders over the metaverse project. They also emphasized their dismay with the NFT’s design, which ensures that 50% of secondary sales will be pocketed by Saunders.
“So not only did Alex Saunders get my money when I bought this NFT, he gets 50 percent of the price if I on-sell it,” they said.
Related: Alex Saunders sued for $350K by Nuggets News follower
On July 28, Cointelegraph reported that Saunders had become embroiled in controversy after Saunders’ friends, followers and associates went public about large sums of money owed to them by Saunders.
Saunders reportedly borrowed 5 BTC from popular YouTuber Bitboy Crypto, and 30 ETH from supporter Ziv Himmelfarb. He reportedly requested to borrow 50 BTC from the controversial HEX founder, Richard Heart who went public with screenshots of private messages purporting to show Saunders requesting the loan.
Saunders also promoted his “Decentral Bank” stablecoin project to his followers, reportedly raising $11 million from his supporters since April. However, investors claim that transaction data for Saunders’ wallets show that the influencer diverted roughly $1.2 million of the funds raised for Decentral Bank to his personal wallets, with some of the funds then being sent to crypto derivatives exchange, FTX.
*Correction@SBF_Alameda This is 1 of the address in which @AlexSaundersAU
managed to take funds from paying users of his community.
Would be nice to know if there is a chance of recovery for these people……..This is now over 8 figures of fraud.https://t.co/4KT6w5rKTY— DeFi Ted (0xbakes) (@DeFi_Ted) July 22, 2021