Playboy Accepted ETH Payments for NFTs

Playboy accepted Ethereum for their NFT collection “Rabbitars,” launched in 2021.
Declining ETH price, and harsh crypto winter, made them lose.

The parent company of Playboy incurred an impairment loss of $4.9 M on ETH accepted as NFT payments. PLBY Group is the parent company of Hugh Hefner’s Playboy. The reasons reported were harsh crypto winter and a considerable decline in crypto prices. The company’s annual filing shed some more light on the situation.

Accepting ETH payment for NFT

The lifestyle and media company reported that they accepted Ethereum as payment for the non-fungible tokens (NFTs) collection called “Rabbitars,” launched in 2021. As per their balance sheets, it is under the column of digital assets. Moreover, the value of these was $327,000 last year. While the previous filing of September 30, 2022, measures the company’s digital assets as worth $1.75 million.

Further explaining the causality, the company said that accounts for their digital assets are classified as “indefinite-lived intangible assets.” They are reportedly subjected to impairment if the asset’s fair value falls below the carrying value at any given time. Moreover, they argue that these losses cannot be recovered, even in the event of fair value rising back up again.

As per the filing, the market price of one ETH in their principal market ranged widely from $964 to $3,813, although in 2022. While at the same time, the carrying value of each Ethereum held by them at the end of the reporting period reflected the lowest price for a single ETH quoted on active exchanges at any given time from the date of its receiving.

Hence the drop in the market price of Ethereum must have had a material impact on the company’s earnings and carrying values. In comparison, the only time ETH held in the balance sheet could be profitable is when they are sold at a higher rate.

Playboy’s Crypto Problems

PLBY launched their NFT project “Rabbitar” in October 2021, when the crypto market was basking in the glory of the recent bull run. Since then, Ethereum, the second-largest coin, has lost 60% of its value. Playboy entered Blockchain technology and the NFT industry earlier that year with an NFT drop called “Liquid Summer.”

This was a collection of digital artwork created in collaboration with an artist called Slimesunday. The collection was minted in May 2021 and featured archival photographs of Playboy model Lenna Sjoobol, dubbed the “First lady on the Internet.”

This exposure was not Playboy’s first in the NFT and crypto arena; in 2018, Playboy TV started accepting Bitcoin payments, and in June of the same year, these payments expanded to Playboy.com also.

PLBY’s Massive Drop with the Crypto Drawdown

The crypto industry faced challenges throughout 2022, but the black swan event of the FTX collapse was the breaking point. Once the third largest cryptocurrency exchange after a series of bad events finally filed for chapter 11 bankruptcy in Delaware, US, on November 11, 2022.

Analyzing the data from the same time frame, PLBY dropped by 40.19 points, registering a massive drop of 1510.55%, and is now at its lowest point in years.