Rekt Brands' Abstract Apple sold out, huh? 220,000 cans evaporated in a crypto-power-chugging-vape-cloud instant, powered by crypto speculation and the allure of DRANK points. You may assume this is just another bizarre crypto gimmick, like Bored Ape burgers or Snoop Dogg nuts. I find something much more depressing bubbling under the surface. What appears to get past this potential regulatory minefield, masquerading as an all-natural elixir, is …

Is DRANK an Unregistered Security?

Let's be blunt: are DRANK points unregistered securities? The SEC is increasingly expanding its focus on going after crypto projects. They are particularly targeting the ones that provide rewards or other incentives which could be interpreted as investment contracts. How are DRANK points different? They can be earned and traded, and have value in the Abstract ecosystem. Does that strike you as the ideal security?

This isn't just about Rekt Brands. It’s much more about the overall “drink-to-earn” model and the bad precedent it sets. If regulators allow this to continue without scrutiny, we will soon see companies inventing their own flavored crypto loyalty programs. This would be dangerously close to evading securities laws and exposing consumers to unnecessary risk. Imagine the havoc, the likelihood that they could be gamed!

We’re not simply advocating against a shady company using the promise of digital assets to hawk a garbage product. It does this by preying on the fear of missing out (FOMO) that’s exploded in the crypto space. It's not just about the sparkling water; it's about the perceived value (and potential profit) associated with the DRANK points and NFTs. That's a dangerous game.

Consumer Protection or Crypto Casino?

Imagine a person who has never been involved in crypto before. Or they buy a hundred cases of Abstract Apple, envisioning making millions with all those DRANK points. They don’t realize how dangerous it is, how fast-moving and uncontrolled it all is, or that the entire ecosystem could implode. And are they really making a truly informed decision, good, bad or indifferent? Or are they being duped into a crypto casino masquerading as a beverage manufacturer?

Rekt Brands may have their eyes set on the Crypto Twitter community for now, but what do they have on deck for broader distribution? Local stores filled with crypto-infused sparkling water. This is a potential disaster in the waiting especially for those who are not privy to the nuances of blockchain and NFTs.

We need safeguards. Education. Clear disclosures. Regulations that protect consumers from predatory practices. The Wild West days of crypto are (supposedly) over.

Innovation or Irresponsible Experimentation?

Look, I'm not against innovation. I am opposed to reckless experimentation that endangers consumers. This drink-to-earn model smacks of the latter. Otherwise, it feels like they’re trying to jam crypto into a use case that just doesn’t need it. They’re simply focused on raising their profile and attracting investment.

Extra points were given out by mistake. And that’s no small oversight either! It exposes a project that has been hamfistedly rushed into production with a disastrous lack of testing and a disregard for being open to exploits. Not only does it erode public trust, but it calls into serious question the competence of the entire development team.

There’s a fine line between innovating and irresponsibly risking consumer safety. And right now, the drink-to-earn model seems a little too much like the latter.

Think about the opioid crisis. Big Pharma failed when it pushed widely addictive drugs onto the market, making billions of dollars in profits as it created devastation across the industry and country. Could drink-to-earn be the more condensed, similarly profane, example of a company making a play for profit over protecting its customer base? In effect, are we producing a whole new breed of crypto junkies, pursuing digital recognition at devastating cost?

The regulatory landscape needs to catch up. In light of the above, regulators should clarify the legality and ethics of drink-to-earn initiatives. Consumers, you need to be vigilant. Do your research. Understand the risks. Don't let the hype cloud your judgment. This is not only true for sparkling water, this is true for your financial health too. It’s a matter of informing the future of consumer protection during this new age of crypto. Are you ready to take that risk?