“Stay calm, your NFTs are still in your wallet,” said Rodrigo Blanco, smiling and seemingly unshaken on an Instagram video, to the tune of a cheerful background beat. Blanco, a Guatemalan, self-proclaimed Christian entrepreneur, was attempting damage control after his digital collection of 5,000 variations of one specific American house, selling for $500 each, was removed from the internet’s largest NFT marketplace, OpenSea.
A nonfungible token, or NFT, is a unique digital asset encoded onto a blockchain, or more simply, an ownership receipt for anything digital — music, art, or in this case, a 3D model of a home in Detroit, Michigan released this past April. Called “Platzees,” these virtual houses are the centerpiece of Platzeeland, widely believed to be Central America’s first metaverse — a vague term encompassing an immersive virtual reality where people can interact digitally. The complexity, along with a general lack of understanding and regulation, has left investors, who buy into these new digital spaces, open to high-profile scams and crashes.
Despite OpenSea’s delisting of Platzees, neither Blanco nor his real estate investment fund, Portafolio Diversificado, have been formally or legally accused of any wrongdoing. Yet, even before its launch, Guatemala’s first metaverse has been hit with turbulence.
Blanco insisted publicly that he did not know why his NFT collection had been taken down. However, an OpenSea spokesperson confirmed to Rest of World that the online marketplace had communicated with the Platzees team about which specific terms of service they had violated. “When we find collections or content to be in violation of our Terms of Service, we enforce our policy in various ways, including delisting collections and in some instances, banning accounts” said the spokesperson. Blanco declined to share with Rest of World the reasons why Platzees were removed.
As countries, and platforms like OpenSea, attempt to come to grips with the legal implications surrounding digital assets, some entrepreneurs have continued to navigate the vacuums created by this growing and unregulated space. Speaking to experts and members of the Platzees community, before and after the OpenSea ban, Rest of World found how, after spending years effectively mobilizing his social media influence to raise a substantial amount of money from NFT sales, the creator of Guatemala’s first metaverse is now facing mounting questions about these investments from his previously trusting followers.
In Blanco’s native Guatemala, the “American house” is an icon of prosperity and aspiration. “It seems like [Platzeeland] is possibly mounted on the ideology of the American Dream,” Pedro Pablo Solares, an independent consultant specializing in Guatemalan migration to the U.S., told Rest of World, “which is what feeds the economy of this country [through remittances].”
Fittingly, unlike many other metaverses where there are few limits on how creative users can be in their designs and architecture, the buildings of Platzeeland are pre-designed, and are all based on one house from Portafolio Diversificado.
The idea of real estate is at the core of Platzee’s suggested value. Most of the capital that stays in a country like Guatemala is poured into real estate, since it is perceived as a safe investment, Andrea Mazariegos, a project lead at Swisscontact, an international development organization, told Rest of World.
But real estate often requires investments that go far beyond the budgets of the vast majority of Latin Americans. Erwin Castillo, a digital entrepreneur who has followed Blanco on social media for approximately three years, told Rest of World he couldn’t afford the steep $40,000 cost of investing directly in Portafolio Diversificado. Before the OpenSea ban, he saw in the Platzee NFTs a chance to invest in real estate at a lower price, believing that they “are backed by physical assets, so they are no longer purely speculative.”
In a statement to Rest of World, Blanco said there is no legal connection between the NFTs and his real estate portfolio company.
The ethos behind Platzeeland seems to go beyond profit-making — it is an aspirational mission with religious overtones. “I see that Rodrigo, thank God, is a good person and hopefully, this metaverse has the magnitude of Disney but there would be characters different from Disney; they would be good, educational, Christian, from the Bible,” said Alejandro Gutiérrez, a 28-year-old crypto enthusiast based in Guatemala, who is currently between jobs, to Rest Of World. He said that he owns six Platzees, but did not reply after the collection was removed from OpenSea.
“Platzee’s brand is closely linked to my personal brand,” Blanco said. “People who have acquired Platzees or will be in Platzeeland are people who trust in us as individuals and as a company, and who share our vision.” It is a vision that has enthralled his more than one million followers across social media accounts.
Alan Yohros, founder of TrabajaSOS, a freelancing marketplace in Guatemala, owns five Platzees, valued by Blanco’s company at $2,500. Speaking before the ban, he told Rest of World that the reason he acquired them was not because of the investment outlook, but rather, to support the project. “Rodrigo is 100% the only reason why I invested in Platzees,” he said, reaffirming his full support even after the ban.
Blanco built his trusting following as a social media influencer. He regularly uploads a range of content — just one of his videos on TikTok has reached over eight million views. His publications often feature images and videos of him showing off his latest real estate acquisitions in the U.S., but he has also spun out other types of content, such as videos with practical tips about the U.S. stock market, personal growth, financial literacy, and Sunday prayers. Blanco also offers free webinars and master classes.
Experts worry about this method of alleged financial education tied up with the sale of financial products. “It’s a huge conflict of interest and we see this kind of pattern a lot,” Tara Annison, the head of technical crypto advisory at Elliptic, a global company offering crypto compliance services and solutions, told Rest of World. “Really big scams like Bitconnect or OneCoin, for instance, all wrapped their offerings around [financial] education. You could buy education packages that would teach you about crypto, but actually they were teaching you how to fall prey to the scam.”
Blanco has claimed that more than 3,000 Platzees have sold already, insisting to Rest of World that Platzeeland is still on track for its scheduled launch in November 2022. On Instagram, the incident does not seem to have altered faithful support for Blanco. Comments below his damage control video were overwhelmingly positive: “I just saw this news,” wrote user @castilloenmanuell, “but I have full confidence in the work you do, and I understand that sometimes external inconveniences can arise that cannot be controlled.”
Around the same time, though, Platzee’s Discord channel of over 22,400 members started showing signs of distress. In the days after the NFTs disappeared from OpenSea, people have continued to ask what happened, with some openly expressing their uneasiness. “Very concerned about the situation, the lack of response in [the] general channels,” wrote a Discord commenter with the username Yuyi. “Platzeeland is already being announced and as a holder I see that there are serious problems. Whether or not they exist on OpenSea is everything for me.”
When it was first announced in March, Platzeeland was touted by its creators as a disruptive and affordable opportunity for those who wanted to tap into what Blanco claimed were higher financial returns than what are typically available in Latin America. “The dividends generated by this investment come from real income in properties which gives the project a really solid backing,” read an official Platzees press release in March. “Platzees is currently the only collection of NFTs generating annual asset-backed dollar-returns.”
These NFTs were Portafolio Diversificado’s attempt to attract “a new range of technological investors who like cryptocurrencies, blockchain, the internet, and who, at the same time, trust our company,” Blanco said.
The promise the Platzees website made to investors was one of a “guaranteed annual return” of 8% on the first year, with varying returns thereafter. In a subsequent Instagram video, Blanco himself was a bit more cautious with his wording, saying Platzees couldn’t guarantee a return. When asked by Rest of World which claim was true, he dismissed the difference as “semantics.”
In the U.S. — where both OpenSea and Portafolio Diversificado are legally registered — there is an ongoing debate about whether digital assets should be considered securities. If so, they would fall under strict regulatory oversight by the U.S. Securities and Exchange Commission (SEC). Without any oversight, there is concern about the potential abuse of NFTs. While announcing the indictment of Nathaniel Chastain, a former OpenSea employee who was charged in June with money laundering and wire fraud, in what the government called the country’s first-ever NFT insider trading case, the U.S. attorney said, “NFTs might be new, but this type of criminal scheme is not.”
In traditional financial sectors across the globe, including those of both the U.S. and Guatemala, legal obligations and regulations aim to protect investors. “That high barrier of entry tries to ensure you don’t have people that either maliciously or accidentally end up losing money for investors,” said Annison, the crypto compliance expert. “But in crypto, at the moment, we don’t have that. So anyone can promise you the world.”