Crypto donors to pay $1.4 million in fees for failed bid to buy US Constitution
Around 17,000 people who tried to use crypto to buy a rare copy of a historical document are now facing a huge bill.
A group of 17,000 people who failed in their attempt to buy a rare copy of the US Constitution are now facing more than $1.4 million in crypto fees.
The crowd-funding effort made headlines for trying to purchase one of only 13 known surviving copies of the US charter at an auction in New York last week, but sadly the group lost to a billionaire who bid $US43 million ($AU60 million) for the document.
Despite being unsuccessful, due to the fact the group were using digital money called ether, individuals will still have to pay charges for donating their money and then receiving a refund.
Ether calls the costs a “gas” fee, and they pay for executing the computer transactions that are essential to moving the digital money, its platform said.
Crypto prices are volatile, but as of Friday’s value the donors had collectively lost some 199.5 ether or about $US850,000 ($AU1.2 million) to donate and another 38.4 ether or roughly $US163,000 ($AU226,000) on refunds, according to Dune Analytics tracking.
The outcome shows the challenges that come with using cryptocurrency for routine financial transactions.
But members of the cryptocurrency consortium ConstitutionDAO remained positive about their efforts.
“We made history and showed the entire world that a group of internet friends can … face a seemingly insurmountable goal and achieve incredible results on an impossible timeline,” it wrote on Twitter as the group disbanded.
The group said it was the first decentralised autonomous organisation that auction house Sotheby’s had ever worked with and that it broke records for the most money crowdfunded in less than 72 hours.
The organisation raised more than $US40 million ($AU55 million) from 17,437 donors who kicked in a median of $206.26 each.
The amount of fees will depend on how much each person donated.
“Guys I love this project but you gotta figure something else out. Having people spend that much gas to reclaim makes no sense,” tweeted @nateliason.
Others were also bittersweet about the result.
“It speaks volumes that a billionaire won the US Constitution as opposed to the 17,437 people who rallied together to try and secure this monument to freedom,” tweeted @museumofcrypto. “Regardless, well-played @ConstitutionDAO.”
The copy of the Constitution signed on September 17, 1787 at Philadelphia’s Independence Hall by America’s founding fathers, including George Washington, was the only known copy that is privately owned.
If the group had won the auction, it planned to work with a museum or historical society to exhibit the document so the public could view it for free.
However, it was not to be.
Instead Kenneth Griffin, chief executive officer of the hedge fund Citadel in Chicago, set a world record for the purchase of a historical document with his $43 million winning bid.
Sotheby’s said Mr Griffin plans to lend the document for free to the Crystal Bridges museum in Bentonville, Arkansas, which will display it without charging visitors.
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