NFT ticket scalping goes wrong for upcoming Paris crypto conference
The organizers of the Ethereum Community Conference (EthCC) have found themselves embroiled in a dispute with a group of anonymous crypto investors.
According to a post published on Wednesday, the group claims that 200 tickets they paid for directly on the Polygon blockchain were all invalidated and they only received half of their money back, thwarting their intentions of reselling some of the tickets.
One of the organizers of the conference, Jerome de Tychey, countered their claims saying it was an exploit and returning all the funds would send out a negative message.
Although the group used a cunning method of sidestepping the main obstacle to reselling the tickets which ultimately proved fruitless. The main issue in the dispute is the conflict between the supposedly decentralized means of ticketing and the centralized control of the conference.
EthCC is by far the largest Ethereum conference in Europe. Prior to the event, tickets were sold as non-fungible tokens (NFTs) through a form on its website. These non-transferable tickets were created through Unlock Protocol and usually contain private metadata of the individual who purchased them.
The group of crypto investors was trying to snap up some of the next batches of tickets after they missed out on the early bird tickets that initially sold out. They went straight to the Polygon blockchain and directly paid for and minted 200 tickets after EthCC offered another batch of 300 tickets on March 23.
They bypassed the form on the website without giving details like the name and email address of the purchaser that would be used to create the private metadata, spending $68,000 in USDC in the process.
Because the EthCC website stated that attendees could generate a signature of a wallet holding one of the NFTs and they would be let in, the investors thought what they were doing would work technically as long as they could redistribute the NFTs to other people’s wallets.
However, not only did the website state that the tickets were non-refundable, but the NFT code itself enforced it, forcing the group to wrap the tokens using Gnosis Safe, which they could try to sell on OpenSea.
Sadly, the conference organizers got wind of this scheme and shut the whole thing down before buyers were able to take control of the wrapped token, unwrap it, and take ownership of the NFT itself. “Unfortunately for the scalper, the tickets are invalid and have no compatible metadata whatsoever,” said de Tychey in a Medium post in March.
The group got in touch with de Tychey a day after his Medium post, asking for a refund. He responded that he was concerned about dealing with taxes on the tickets since they had been paid for and that he wasn’t inclined to encourage those trying to manipulate the system by refunding them when their exploits don’t work.
De Tychey offered the group half of their money back (about $34,000), which they eventually accepted. Yet they continue to demand the remaining amount, according to the latest Medium post.