TreasureNFT investors alarmed as withdrawal issues rise

KARACHI: A wave of panic has swept through a small trading community that uses a lesser-known platform called ‘TreasureNFT’ for high-risk, high-return investments. An unexpected delay in withdrawal requests has raised concerns among new users about their investments.

Karachi-based S* (name withheld to protect identity) says while she was able to withdraw her initial investment, the new members are stuck.

Rumours are rife that the platform that claims to offer AI-driven NFT trading with substantial returns is a fraudulent scheme.

S is worried, not for her investment but for those people who joined the platform on her recommendation. “There are multiple teams, and every team has a team lead called a head who communicates the latest developments.”

S has been told that delays in payments are due to ‘congestion’ on the third-party app used for fund transfer. The platform uses Binance to honour withdrawal requests. A surge in withdrawals, driven by Eid spending, has caused congestion. Per S, the heads are not sure if the company will stay, but they have reasons to believe that the current trouble is a software glitch.

According to S, TreasureNFT announced Eid rewards of up to $5,000, prompting many investors to rush withdrawal requests instead of waiting. “Now we have been told that the company will use another app for fund transfer.” “[TreasureNFT] previously took 68 hours to honour requests; it was extended to 168 hours, and they have now promised to withdraw money within 120 hours.” S said that most people who invested do have an idea about the risks attached to it. “Investors from the salaried class are more worried because they usually dip into their savings to make such investments.”

TreasureNFT did not respond to The News’s request for comment.

NFTs (non-fungible tokens) are digital assets, such as artwork, videos or music, that are recorded on a blockchain. Each NFT has a unique identification code, ensuring its authenticity and ownership.

After the 2022 crypto crash, most people abandoned NFTs. According to ‘Forbes’, Twitter founder Jack Dorsey’s first tweet that was sold as an NFT for $2.9 million saw a dramatic crash, losing its value by 99 per cent. Then, the highest bid was at $280. Unofficial accounts suggest that the NFT’s value has fallen even more.

On TreasureNFT and the ongoing rumours about it being a scam, Chairperson of the Wireless and Internet Service Providers Association of Pakistan (WISPAP) Shahzad Arshad says, “I see a pressing truth: scammers are evolving, and so must we. Today’s scammers are no longer clumsy con artists with misspelt emails. The FBI pegged losses from such ‘business email compromise’ scams at over $4.5 billion globally in 2023, a figure dwarfed by the untold toll of smaller, personal frauds.”

Whether or not the platform is genuine, it is certain that “a legitimate venture does not promise the moon overnight -- TreasureNFT’s 1,500 per cent annualised returns defy reason, unlike the transparent trades of credible platforms,” Arshad says.

A Middle East-based financial analyst says that what investors have told him about the site implies that it is not genuine. “It sounds like a typical multi-level marketing (MLM) business, which is usually a controversial way of doing business.”

“These scams are quite common in Pakistan and have had multiple rebirths here, every time with a different name.”

The analyst’s objection to the business model is the ambiguity regarding the source of profit. “When you invest in stocks, you know where your money is and how it is being used by the company. In this case, no one knows why or how the company is paying huge returns.”

But why do such schemes keep getting the oxygen they need to remain alive? Muhammad* (name changed to protect privacy), a small investor, sees this as a result of economic inequality in the country.

“In Larkana, rice vendors need labourers to load rice bags on trucks. There is currently a shortage of labourers because the website has helped them earn the amount they needed to live comfortably for a month or two without any strenuous work,” he explains.

The minimum wage in Pakistan is Rs37,000, and daily wagers hardly earn the amount. According to some investors, TreasureNFT promises daily returns of 4.3-6.8 per cent for every $100 (a little over Rs28,000) invested.

But are investors at fault? The chairperson of Wispap believes “individuals cannot stand alone against AI’s cunning. Governments must rise as guardians. Pakistan could mirror the UK’s Online Safety Act, forcing platforms to purge fraudulent content and extend laws to punish those involved in fraudulent activities. Imagine a national campaign -- ‘Think Twice, Stay Wise’ -- flooding airwaves and WhatsApp with scam-spotting tips, or an AI-powered fraud tracker, like Google’s 2024 innovations, flagging threats in real time. The Federal Investigation Agency could lead global efforts, partnering with the Global Anti-Scams Alliance to chase cross-border crooks, while streamlined reporting and victim funds ease the aftermath.”

He adds, “Internet service providers (ISPs) could monitor traffic for bot swarms, alerting users to oddities, and flood inboxes with scam warnings.”

Opinions on social media are divided. On Binance Square, a social networking content platform where users participate in community discussions about crypto and Web3, members have raised alarm bells and put up warning signs against TreasureNFT.

On Facebook, many accounts that claim to be in conversation with the website’s ‘country heads’ are convincing people to stay put.

An unnamed man has sent a long audio on WhatsApp, available with The News, to his team members. In the voice note, he says that the platform’s country head has posted updates on Telegram, a messaging app, which show that the company is not going anywhere. According to the ‘team lead’, the platform is introducing alternative ways for withdrawals.

He puts the blame on people’s impatience and berated them for requesting huge withdrawals. His audio suggests that a platform has a cap on withdrawals depending on ‘levels’. An investor on Level 1 is only allowed to withdraw Rs200-300. The investors requested Rs10,000. He says that this overwhelmed the system.

“Those whose requests are within the amount allowed will get their money, but those who have exceeded the limit will have their requests cancelled.” He further explains to his team of 700-plus members that the company has announced new initiatives that show that they are not interested in shutting down. Previously, the app was only available on Android. Now, the company has launched an iOS version, another ‘positive sign’ for those who insist on its credibility. He again blames people’s greed for the situation and concludes the voice note by saying that members should “pray for things to get better”.