Friendsies NFT Project Under Heavy Fire After Operations ‘Pause’ – Was It A Rug Pull?

The creators of Friendsies, a collection of non-fungible tokens (NFTs), have come under a barrage of criticisms after they announced a “pause” in the project’s operations and subsequently deleted their Twitter account.

Some have speculated that this action implies the project may be a rug pull, a form of cryptocurrency scam in which the founders abruptly abandon the market and leave investors holding worthless tokens.

Friendsies NFT Project: A Rug Pull?

The Friendsies team announced on February 21 that the “volatile nature” of the cryptocurrency market made it difficult to advance the project. So, they have chosen to suspend the initiative till the market becomes more “stable and mature.”

Friendsies said:

“We had the best intentions to create a genuine digital companion for the future,” the company tweeted. “However, the market’s volatility and difficulties have made it increasingly challenging to advance this project in a manner that meets our standards.”

In line with Friendsies’ objective of creating 10,000 charming avatars, the project collaborated with Christie’s in March 2022 to auction off nine early-access mint passes for the rarest Friendsies on OpenSea’s secondary marketplace.

However, after the announcement was made on Twitter, some users who asked about it were blocked, and Friendsies’ account was eventually taken down from the platform.

Where Are The Funds Now?

In the hours after the Friendsies NFT project announced a “pause” and deleted all of its social media accounts, suspicions of a rug pull circulated rapidly online.

ZachXBT, a pseudonymous on-chain sleuth, asserts that the minting of 10,000 NFTs resulted in $5.3 million worth of ETH, despite the fact that the price of ETH gradually decreased during the minting process. It is unclear if and how the money were utilized.

In response to the tweet by @Zachxbt, @ArkhamInterl responded:

“Btw when these guys say “market volatility” they really mean “we bagheld ETH down 70% and then sold the bottom” and linked to the following transaction history:

According to ZachXBT, the developers claimed in their plan that “1.25% of all royalties (47 ETH) were meant to be handed back to holders,” but this never occurred, and the roadmap was deleted from Discord to ensure there were no evidence of it.

NFT investor Tmagled contended that a year after being targeted for speaking negatively about the venture, the rug pull he warned against so vehemently was finally happening.

During the initial stages of the collection, Twitter users accused Farokh, the host of Rug Radio, and Jen Stark, a generative artist, of hyping up the collection on social media.

Prominent NFT personalities, such as Farokh, were allegedly early advocates of the concept and purportedly made millions of dollars from its initial sale.

To Abandon Or Not – That’s The Question

In response to the considerable amount of backlash they received, the Friendsies team posted a tweet to reassure their supporters that they had no plans to rug-pull investors:

Since then, the project’s Twitter account has been restored, and the project’s creators have denied fiercely that they are “abandoning” the initiative.

Legal Action In The Works?

Meanwhile, former NFT product head for Mastercard and current CEO of Web3 social app startup Joincircle, Satvik Sethi, said that the project founders have been inactive in the Discord server following the “pause” announcement.

NFT holders are now considering potential next steps amongst themselves, such as ways to support community members or even potential legal action over unfulfilled commitments.

-Featured image from CryptoStars