The Ethereum Community Conference (EthCC) tickets were unavailable to all other attendees due to a group of anonymous crypto investors. These so-called crypto enthusiasts scalped 200 NFT tickets for USDC. However, the headlines occurred when those tickets were all invalidated, and they only received half of their money back.
The EthCC tickets were NFTs on the Polygon blockchain with metadata attached to them for identity verification. There were two ways to check into the conference using NFTs, either through a QR code sent to the email address or through the crypto wallet that owns the NFT.
The tickets were non-transferable and could be purchased with USDC tokens or a credit card with a stripe.
The NFT ticket scalpers (who purchased 200 tickets at regular prices and then resold them at much higher prices) missed the first 100 early bird tickets. Thus decided to look at the code in order to guarantee to secure those tickets in the next batch.
When EthCC offered another batch of 300 tickets in March, the group devised a method to make the non-transferable NFTs transferable.
They went straight to the Polygon blockchain and directly paid for and minted 200 of them, spending $68,000 in USDC on the NFT tickets. Because they bypassed the website’s form, those NFT tickets lacked metadata.
Because the tickets cannot be transferred, the scalpers created a Gnosis Safe contract for each ticket scalped and turned it into an NFT collection on OpenSea in order to resell it.
When the conference organizers discovered this ruse, they canceled the entire event.
This means that EthCC received the funds while the investors received worthless NFTs in exchange.
The group contacted Jerome de Tychey, one of the EthCC organizers, to request a refund. According to screenshots of their communication, the group of crypto investors admitted to getting carried away.
De Tychey informed them that he was concerned about dealing with taxes on the tickets because they had already been paid for. Furthermore, he did not want to encourage those attempting to exploit the system by refunding them when their attacks failed.
He stated that he would refund half of the group’s money (approximately $34,000).
The argument that they have is how a crypto-native organization like EthCC can commit to an on-chain mechanism to sell tickets and then refuse to honor the validity of the tickets because they disliked the mechanism design.
The group also revealed that the conference’s treasury is being used to earn yield in DeFi protocols and may be managed by a single EoA (Externally Owned Account).
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