Crypto investors raise millions to buy first edition of the U.S. Constitution

CNBC's Steve Kovach joins Shep Smith to report on ConstitutionDAO, a group that has raised millions of dollars in cryptocurrencies to buy a copy of the U.S. Constitution. For access to live and exclusive video from CNBC subscribe to CNBC PRO: https://cnb.cx/2NGeIvi

A consortium of crypto investors pulled together $47 million worth of ether in a week to try to buy a rare, first-edition copy of the U.S. Constitution at a Sotheby’s auction — and lost. What happens to all that cash is up to the people.

The group, known as ConstitutionDAO, wrote in its ‘frequently asked questions’ that the funds would be redeemable, minus a transaction fee.

ConstitutionDAO contributor Alice Ma confirmed to CNBC that they would “for sure...provide everyone an option for a refund.” Ma went on to say that “there are many people who have already said they want to leave their funds in the wallet, and we are deciding between several options internally for that scenario!”

On a Twitter Spaces following the lost bid, it was unclear where exactly the money would go next. Some members of the DAO shared plans to potentially purpose the funds toward future auctions.

Member Liz Yang, chiming in from on board an American Airlines plane, said that she hoped to put the money to good use. “I feel like we set the bar so high,” said Yang. “We need to do something equally as epic, whether it’s a future auction, but that’s for the people to decide.”

In theory, next steps will be determined by the “decentralized autonomous organization” that facilitated the fundraise. You can think of a DAO like a group of individuals acting in concert with no single leader. Unlike a normal pool of investors, DAOs rely on cryptocurrency technology to track and validate participation in the group, as well as to facilitate the inner-workings of how to raise and distribute large amounts of cash.

ConstitutionDAO’s rallying call was “WAGBI” or “we’re all gonna buy it.” But in fact, the thousands of investors who comprise this DAO would not have received fractional ownership of the document. Instead, they would have become holders of a crypto token known as “People” that would have granted them certain voting rights over the future of the document.

“Everyone who buys in, they get a portion of the governance token of the DAO, and they can then use that token to vote on where the Constitution should actually be custodied,” Ma told CNBC prior to the auction. The crypto contingent had been weighing different museums and libraries across the country, including the Smithsonian and the New York Public Library.

Many wondered why organizers stopped short of making the winning offer in a heated bidding war that gaveled at $41 million.

One organizer in the group’s Discord server said that they stopped the bidding where they did because there wouldn’t have been enough money left over to account for the “proper care and maintenance” required for custody of the Constitution.

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