Playboy loses $5M on Ethereum earned from NFT sales

Parent of Hugh Hefner’s Playboy, PLBY Group, has disclosed a loss of $4.9 million on the Ethereum it held last year — citing a crypto winter as the cause.

Playboy’s NFT collection, Rabbitars, launched in 2021 at the peak of the NFT craze. According to its 10-K form filed on Thursday, the value of its digital assets was $327,000 as of last year. But in September 2022, PLBY’s filings showed a value of $1.75 million in digital assets.

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Indeed, since Rabbitars were released two years ago, the price of ether has plummeted over 60%.

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• PLBY considers its digital assets as “indefinite-lived intangible assets.”
• They are subject to impairment losses if the fair value of assets falls below carrying value at any time.
• Impairment losses can’t be recovered — even if fair value increases once more.

“The market price of one Ethereum in our principal market ranged from $964 – $3,813 during the year ended December 31, 2022, but the carrying value of each Ethereum we held at the end of the reporting period reflects the lowest price of one Ethereum quoted on the active exchange at any time since its receipt,” PLBY explained in its filing.

“Therefore, negative swings in the market price of Ethereum could have a material impact on the company’s earnings and carrying value, while only time a rise in prices will impact the company’s earnings positively, is when the Ethereum held in the balance sheet, are sold at a gain,” the filing said.

Playboy has been crypto curious for years

Playboy has actually had a long history with NFTs, Bitcoin, and blockchain. In 2018, it planned to integrate a crypto token called Vice Industry Token (VIT) onto its platforms. VIT would have been used to reward viewers for watching its content, leaving comments, and voting.

It even planned to introduce a crypto wallet on its websites. However, the Canadian blockchain startup it partnered with to make it happen, Global Blockchain Technologies (GBT) was sued by Playboy for fraud and breaching contract.