Was the popular NFT Azuki collection founded by a scammer?

Azuki, one of the most popular NFT collections, saw its value drop by almost 75% in just a few days. The reason must be found on the founder’s side, as many suspect of having participated in fraud.

Until a few days ago, the NFT Azuki collection was one of the most expensive and coveted on the market. On May 3, 2022, the bottom price of NFTs was over $ 88,000 according to data from the specialized website NFT Floor Price. But on May 11, 2022, just a week later, the price dropped to $ 21,376, a 75% drop in value.

This is news that turns the entire NFT ecosystem upside down. The fall in Azuki prices is partly due to the current problems with bitcoin. But it is especially emphasized by the fact that Zagabondthe founder of the project, is accused of cheating users of these 3 previous NFT projects.

NFTs, for non-fungible tokens (or non-exchangeable tokens in French), use blockchain technology to enter information. They function in a way like certificates of authenticity that have allowed artists to create a virtual art market that breaks records and that attracts a lot of collectors and capital. But NFTs are not without risks: between highly volatile prices and various controversies over copyrights and their energy consumption, tokens are also often used by scammers to create scams.

Is this the end of Azuki NFTs?  / Source: Numerama
Is this the end of Azuki NFTs? / Source: Numerama

Crypto scams?

It’s with a humble title blog post ” a builder’s journey Azuki’s problems began. Zagabond, the author of the publication and founder of the Azuki Collection, explains that this collection is not his first attempt at the NFT world. In particular, he writes that these three previous NFT projects, CryptoPhunks, CryptoZunks and Tendies, were all failures, but they helped him grow.

But instead of inspiring compassion, what he says in these lines made readers revolt: The three projects that Zagabond mentions would have been abandoned from one day to the next by the teams without anyone having warning or refund. For some, these projects would be “rye pull”, that is, fraud. “Rug pull” is a term used to refer to crypto-fraud when creators leave with the money that investors have given or when a site closes without giving any notice.

“Carpet pulls” are not uncommon in the crypto world: the represented ” 37% of all fraudulent revenue from cryptocurrency in 2021 “, According to Cryptoast, and they regularly make headlines in trade magazines. But until then, Zagabond had slipped through, simply because he launched the projects anonymously, under a different name.

How long do NFTs live?

The founder dismissed the fraud allegations, explaining that ” the projects had not found their goals and that it was not a blanket pull. But very shortly after the post was published, Azuki prices went downhill and they have not been able to recover since. Despite apologies and assurances that he had not tried to deceive users of his previous projects, there are still doubts about Zagabond’s intentions.

Are Azuki NFTs part of a scam?  // Source: Azuki
Are Azuki NFTs part of a scam? // Source: Azuki

The story of Azuki also opens the debate about the lifespan of NFT projects. Tokens are registered on blockchain and must therefore be perpetual. In a Twitter Space hosted after his post was published, Zagabond criticized that “ customers expect teams and developers to continue working on ad vitamin aeternam projects But from what moment can a collection left by its creators be considered a scam and not an abandonment?

The fall is as unexpected as it is impressive. Before the case broke, Azuki was among the hottest NFT collections, and was even described as ” Succession from Bored Ape Yacht Club and CryptoPunk. Does Zagabond’s story mark the end of the adventure? For now, nothing is certain: Although the price of NFTs has dropped impressively, many investors are buying tokens cheaply in hopes of being able to sell them again soon.

In any case, on Discord dedicated to the project, the owners do not hide their dismay, with messages announcing the project’s ‘death’ or asking for a refund. Others chose humor and explained that they would now invest in the crypto LUNA or the stackcoin UST – two other projects in great difficulty at the moment.

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