Did CNN Just Pull Off The Highest Profile NFT Rug Pull Yet?

The media broadcasting giant CNN is pulling out of the NFT space and closing its Vault NFT marketplace. The statement yesterday afternoon confirmed the plans, which is a big shock to people who have invested in the project. In fact, some have accused CNN of performing a rug pull. Last month CNN was encouraging its community to buy extra tokens, for an upcoming ‘Art of Voting’ NFT series, due to launch on November 8th.

The CNN NFT project is ending

CNN created the marketplace to allow their community to collect digital pieces of history, similar to how the NBA top shot NFTs work. For example, NFTs would include mints of news reports and artistic interpretations of historic world moments. Significantly, the media giants launched Vault by CNN in the summer of 2021 at the height of the NFT boom.

The CNN NFT marketplace is officially closing for trade but will remain open to allow users to view their NFT collections.

The community behind the project is outraged at the news, with some suggesting it is a ‘rug pull lite’, especially considering how vocal they have been about the project until recently. The team also promised a whole range of events and features for 2022/2023 in its roadmap. 

In April, Press Gazette reported that thanks to its web3 project, CNN had made over 300 thousand dollars. 

Compensation is on offer but is it enough?

CNN plans to offer compensation to NFT collectors on its platform. The reimbursements will work based on a snapshot taken of wallets on October 6th. A CNN staffer named Jason said, “The distribution will be either FLOW tokens or stablecoins deposited into each collector’s wallet. We are currently working out the details, but expect the distribution amount to be roughly 20% of the original mint price for each Vault NFT owned.”

Interestingly, the snapshot will not consider the NFT purchase price. Because of this, the snapshot taken on October 6th will differ largely from most original purchase prices.

No doubt, some NFT holders will get only a fraction of their initial funds back. For now, this is what CNN is offering to its loyal NFT community.

Finally, with global companies joining the web3 space every day, it is surprising to see CNN leaving.