Crypto Investors Who Failed To Buy A Copy Of Stoned Constitution

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It was not part of the plan.

The crowdfunding cryptocurrency group that outbid a rare first edition of the U.S. Constitution is now being criticized by some members as a scam.

The group, which was called ConstitutionDAO, which stands for Decentralized Autonomous Organization, ended up raising more than $ 40 million in the form of Ether, the native digital currency of the popular Ethereum blockchain.

But now the group is facing fraud allegations after crypto enthusiasts failed to buy their target, according to Vice News.

Before the failed bidding attempt and as ConstitutionDAO accumulated its funds, the administrators behind the group explained that contributors would not actually receive a fraction of the ownership of the text.

Instead, they would get a governance token, called $ PEOPLE, which would allow them to vote on where the Constitution is going, its posting and other matters, the organization said.

The rare original copy of the Constitution sold for $ 43 million on November 18, 2021.AFP via Getty Images

But on Saturday, after the failed offer, the DAO announced that it would drop $ PEOPLE because “we did not acquire the constitution and the explicit reason for $ PEOPLE to exist has now run its course.” one administrator said in what was billed as “a note from our legal team,” according to Vice.

Instead, the group said, they would establish a new token called “We the People” or $ WTP, which would govern a still-undetermined project.

Contributors could either participate in the new project or request a refund, but the refund would only be a fraction of their initial contribution due to the alleged gas charges, which are charged for processing an ether transaction.

The ConstitutionDAO group ended up raising more than $ 40 million in its failed attempt to buy the rare copy of the Constitution.

Quartz estimated the total amount lost in gas costs to be over $ 1.5 million.

Those developer weekend announcements had the effect of driving down the value of the $ PEOPLE tokens that the original contributors had obtained by purchasing into the fund, sparking outrage from contributors, according to Vice.

Amid mounting backlash, the project’s developers backed down on Sunday, now abandoning plans to co-opt funds for a new project and instead opting for reimbursement of all who contributed, minus onerous gas costs.

In an attempt to limit the confusion, the developers even removed the old announcements about the new token, although this ended up confusing contributors even more, according to Vice.

Kenneth Griffin, founder and CEO of Citadel LLC, outbid the group of crypto enthusiasts for the Constitution.Bloomberg via Getty Images

“The main team should have asked people to vote with their tokens,” said one user in the Discord community, according to Vice.

“There was no need for anything. it was not necessary for someone on the core team to deliberate. the whole point of the dao and crypto + ethos infrastructure was missed.

Others littered the channel with messages of claims and accusations of the entire scam scheme.

“This project lost the community when publicly [sic] the announcements made have been deleted. this created speculation and uncertainties that could have been avoided, ”said another user.

ConstitutionDAO contributors could either participate in the new project or request a refund, but the refund would only be a fraction of their original contribution.

“It’s chaos without a leader. the worst of the dao and the real world. people had a $ people token, why weren’t they asked to vote. “

The entire episode, from start to finish, highlights both the passionate enthusiasm associated with the crypto movement and the web3 movement.

However, the mess the project ended up causing also highlights the uncertainties surrounding the industry.

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