NFT can be refunded within 14 days without any reason even if it is zeroed? Porsche has set a good example

If you ask which NFT projects have attracted the most attention from the crypto community recently, Porsche's "PORSCHΞ 911" is definitely one of them. According to NFTGo.io data, in just 5 days since its launch, the market value of this NFT series has reached 7.49 million US dollars, and the transaction volume is close to 6 million US dollars.

However, the project was criticized after its release, and it was believed that the minting price of 0.911 ETH per coin was too expensive and inconsistent with the spirit of Web3. Porsche then posted on social media that in view of the opinions of holders, Porsche NFT will reduce the supply and stop minting on January 25 to continue to create the best experience for the exclusive community. However, one wave has not yet settled, and another wave has arisen. A mandatory checkbox in the minting process of "PORSCHΞ 911" (as shown in the figure below) has caused another controversy. In fact, if the user checks the box, it is likely to lose some of the rights and interests.

The checkbox reads: “I agree to the immediate provision of the contractual service (ie, receiving the NFT) and I have been informed that I hereby lose the right of withdrawl.” It means “I agree to the immediate provision of the contractual service (ie, receiving the NFT), and I have been informed that this operation will lose the right of withdrawal.”

Wait, what does this mean?!

Can NFT consumers apply for a 14-day no-reason refund?

If you want to mint and become the owner of a Porsche NFT, you must agree to the terms of service and self-waive the so-called "right of withdrawal." Although most crypto community users may have never heard of such a right, it is obviously important enough for German automakers like Porsche. In the link to the associated "right of withdrawal" document, Porsche explains exactly what this means in a striking black and white manner, stating: "If you withdraw from this contract within 14 days, Porsche will refund you all payments received from you."

You read that right. Porsche offers the option of a full refund within 14 days after the NFT is minted. It doesn’t matter if the floor price is zero or if the NFT project exists, because you are entitled to a full refund. But the question is, why is only Porsche doing this? Why have you never seen similar reminder notifications when other NFT projects are minted?

In fact, in the UK, as well as other EU countries, the law provides that consumers have a 14-day right to cancel transactions when purchasing goods or services online. This legal provision is called the "Distance Selling Regulations", which also includes digital goods and downloads, namely books, in-game purchases, and NFTs. For merchants (such as Porsche), it is not impossible not to be subject to this regulation, but the premise is to inform customers.

Although there is no precedent for NFT-related regulations so far, many experts believe that NFTs will actually be protected by this regulation - because they are digital goods. From this perspective, it makes perfect sense why Porsche wants customers to give up this right. If the floor price of the "PORSCHΞ 911" NFT series falls below the initial price of 0.911 ETH on the secondary market (in fact, this situation has already happened earlier this week), some buyers are likely to turn around and ask Porsche to fully refund the initial minting fee. However, by checking that box, current Porsche NFT holders can no longer make such a request.

The problem is that Porsche's move will make the crypto community pay attention to the "right of withdrawal" and investigate whether other NFT companies are forcing their customers to give up their refund rights like Porsche. More importantly, according to EU and UK laws, if a company fails to inform customers of the right of withdrawal, these customers do not have only two weeks to get a full refund, but a full year to file a complaint.

Will the “right of withdrawal” affect the broader NFT market?

Judging from past transaction records, Yuga Labs’ NFT series “Bored Ape” Bored Ape Yacht Club and the metaverse game Otherside’s virtual plot “Otherdeed” may not have informed customers that they have the right to a 14-day refund window. For example, Yuga Labs’ Otherdeeds contract terms do not mention the right of withdrawal under EU or UK law.

Now, some Yuga Labs customers are trying to use this right to request a refund for NFTs purchased last year. For example, Paul Price from London has asked the company to refund the Otherdeed he bought last May, but the request was rejected by Yuga Labs because they claimed that Otherdeed's transaction order does not provide any guarantee or refund rights. However, in the UK, if NFT companies like Yuga Labs continue to refuse to refund customers after being found to have violated the country's distance sales regulations, they may be subject to severe fines of "unlimited amounts" and may even be held criminally liable.

The initial minting cost of the virtual plot "Otherdeed" in Yuga Labs' metaverse game Otherside was as high as 305 APE, or about US$5,800. However, according to data from the current secondary market OpenSea, the floor price of this NFT series is only 1.57 ETH, or about US$2,469, a drop of nearly 60%.

Paul Price said he had communicated the matter with an attorney and referred questions to Yuga Labs' corporate legal department, but the latter has so far declined to comment on the matter.

John Salmon, a London digital asset lawyer, said: "Many crypto companies clearly do not understand the relevant regulations in Europe and the UK, and are still hyping their NFT projects." John was responsible for drafting cryptocurrency policies and consulted European regulators on related issues. He believes that US companies often do not consider the legal rules of other markets. "This is a common problem for US crypto companies, but the United States cannot represent the whole world. There is a world outside the United States, isn't it?"

The NFT industry has quickly become popular in a very short period of time, reaching a scale of tens of billions of dollars almost overnight. The previous bull market caused the market value of many NFT projects to expand extremely, but they did not pay serious attention to the policies and regulations of different jurisdictions. The recent bear market has finally made them start to seriously examine compliance issues. There is no doubt that Porsche has sounded a wake-up call for the NFT market.