“Alex was a really trustworthy guy and I was keen to be a part of what he built,” said one person based in Newcastle, who bought an NFT from Mr Saunders last November.
“But the launch date kept getting put off and now Alex has gone completely silent.”
This project is separate to another project for which Mr Saunders allegedly raised $9 million in May, which has prompted a lawsuit in the Victorian Supreme Court. There are also questions around $5 million Mr Saunders may have borrowed from various people who have not yet been repaid.
Mr Saunders minted 100 NFTs for this project on 30 November and sold all of them within weeks.
NFTs can be traded in a marketplace and Mr Saunders had set the terms of each trade so the ‘creator’ would collect 50 per cent of each subsequent sale.
“So not only did Alex Saunders get my money when I bought this NFT, he gets 50 per cent of the price if I on-sell it,” said the investor, who said they are considering legal action.
Investors were told the money raised through the NFTs would be used to build a Nugget’s News ‘metaverse’.
A metaverse is a virtual 3D environment, which blends augmented reality with virtual reality and allows people to interact with each other.
In a post to his paid Facebook group, which was undergoing a re-branding to Collective Shift, Mr Saunders said the headquarters would be “an educational, collaborative workspace in virtual reality. Along with professional offices & function centre.”
“For private events, special NFT tickets will beam you to specific locations when you enter the building and it recognises your digital ticket ownership,” reads the post.
Mr Saunders engaged Polyagonal Mind to construct the digital building in a rented space in Decentraland, a popular metaverse that has previously sold virtual property for as much as $900,000.
“It wasn’t a big job but we finished building it and then the date of launch was pushed back and pushed back,” Daniel García, chief executive of Polygonal Mind, told the Financial Review.
“When we learned of all these other problems Alex has been having, we have drawn a line under this one and let it go. We don’t want to be associated with this kind of activity.”
The project was quoted at under $10,000 and while Mr García sent a contract to Mr Saunders for signing, it was never returned.
The Financial Review can confirm the plot of land Mr Saunders had rented in Crypto Alley, a district of Decentraland has been vacated and the building Polygonal Mind developed has been removed.
“We’ve now made all the code open source so other people can use and build with it,” Mr García said.
“I believe he could have made a lot of money running this legitimate business, so why all this shady stuff?“