Retail investors who bought the NFT cards – featuring over 1,100 cricketers including the likes of Sachin Tendulkar and Virender Sehwag – are now staring at potential losses of nearly Rs 30-40 crore.
“It’s a big shocker, a lot of us feel blank,” said an engineer from Hyderabad requesting anonymity, adding that his investment of Rs 16 lakh into digital collectibles sold by Rario went to “zero” overnight. “When Sachin Tendulkar invested in Rario, I thought I could trust it,” said the distraught 30-year-old.
In a statement on X Tuesday night, Rario said it will shut its current product effective January 29 and relaunch in March. “The current Rario cards will not be usable in the upcoming platform,” the company said. “Additional perks” will be offered to loyal users in the new platform, it added, though it’s not clear what these perks were.
— rariohq (@rariohq)
Rario’s majority backer Dream Sports declined to comment on the development.
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Following the announcement, users took to Telegram and social media platform X to voice their distress and demand a refund. As of April last year, the platform had sold 1.5 million player cards ranging from $1-$250. NFTs of Sachin Tendulkar sold for about $1,000 at one point.
Responding to the uproar, Rario backtracked somewhat, posting on X Wednesday evening that it is working on a plan to compensate users for their losses.
“We understand that some of you have experienced losses from your investments in Rario cards, which we would obviously never want for our users. We are working with various stakeholders to implement a plan to compensate you for any such losses and will provide you with details of the same by next week.”
After a $120 million series-A funding in April 2022 from Dream Sports and investors such as Alpha Wave Global, Rario had spent around Rs 148 crore on nearly 170 licensing deals, forming partnerships with cricketing entities such as Cricket Australia and the Australian Cricketers’ Association to create NFTs and games.
These digital cards allowed users to form teams and participate in D3, Dream Sports’ strategy game. The platform had sold more than 1.5 million player cards, and had over 700,000 users as of April last year.
Like other crypto products, Rario’s NFTs were heavily pumped by influencers. Cricket commentator and YouTuber Aakash Chopra promoted Rario to his 4.7 million subscribers, calling it a “digital asset for life”. NFTs purchased on Rario cannot be traded or used on other platforms.
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The turmoil at Rario has been unfolding for over nine months now. In April last year, the Delhi High Court rejected Rario’s plea against rival Striker and MPL, asserting that using celebrity names and images for satire, parody, art, and similar purposes was protected under Article 19(1) of the Constitution and did not infringe on the right to publicity. In doing so, it invalidated the costly rights acquired by Rario. Striker shut down in December 2023.
Following the loss, disagreements heightened between Dream Sports and Rario founders Ankit Wadhwa and Sunny Bhanot, which ultimately led to the founders departing the company in August 2023.
“We trusted the platform because of Dream11 and because of their partnerships with cricketers like Virender Sehwag and Australia’s cricket board,” said Rajat Mittal, a 26-year-old from Haryana. Mittal invested about Rs 5 lakh to buy digital collectibles that were used in Dream11’s strategy game D3. The platform was rife with users who had borrowed “lakhs of rupees” to buy NFTs, he said.
While it remains to be seen how exactly Rario compensates its users, there’s really not much available to them in terms of legal remedies.
“There is no legal framework governing NFTs in India. Hence, investors are left to fend for themselves without any specific legal remedy and their recourse is under general contract laws and criminal laws,” said Durgesh Singh, partner, IndiaLaw LLP.