We’ve been laughing our butts off at all the NFT scams that have been happening. We thought that we – as sneakerheads – were completely safe from it all. And, although for the most part of sneaker history, this was true! But, Zadeh Kicks has come to plant doubt in our hearts and possibly ruin the game for us!
Usually, when you know where to go, the sneaker resale market is not as volatile and scary. Then again, if you’re going off leads you find on Craigslist, that’s on you! But, other than that, people usually go through their entire reselling career with minimal scam situations! However, that might all possibly change because of the most recent and unprecedented sneaker rug pull ever. A long-running and established sneaker reselling business (founded in 2013) abruptly dissolved its operations. Thus, leaving behind it seven figures worth of unfulfilled orders.
Ever since then, social media has been alive with speculations on what happened and how to deal with it. So, let’s dive deep into the things that occurred here. What did this alleged scam entail? Where are there signs to look out for? How will people be compensated? Keep reading to find out…
THE ZADEH KICKS SCAM
Michael Malekzadeh – otherwise known as Zadeh Kicks – established his reselling business back in 2013. And then, on May 19th, 2022, he filed a motion to voluntarily dissolve his company in the circuit of Oregon’s Lane County. His reasoning behind this was: that he couldn’t keep up with the rapid growth of this company in the past two years…
To be fair, the dissolving of Zadeh Kicks came down to inadequate internal systems and processes. Apparently, it was too hard to keep up with people’s high demands. And so, Malekzadeh hasn’t been taking since the 29th of April! However, you can’t just pull the trigger whenever push comes to shove. Preliminary estimates of the liabilities in comparison to Zadeh’s assets show a huge tip of the scale! The liabilities outweigh their asset by MILLIONS of dollars!
Naturally, the news spread like wildfire over social media with people FREAKING OUT. There were some people who sustained minimal damage from the situation. However, a lot of people came forward with six-figure high amounts.
This is all because of the Zadek Kicks preorder system where people pay months in advance for their products.
What is Zadeh Kicks?
So, to give you a better understanding of what is really going on, you gotta know how Zadeh Kicks operates. What made it so appealing to people to make their scam worth millions of dollars? Well, Zadeh Kicks offered preorders for hyped sneakers in advance of their actual release! With price points that are often lower than normal for their market value.
In some cases, your preorder might not go through because a sneaker release got canceled. Or, it turned out to be an exclusive release dropping at specific retailers. What they did then was offer store credit or highly taxes refunds instead. The opportunity to get your hands on completely authentic sneakers without much hassle? Every sneakerhead’s dream! Right?
Well, this one proved to be a nightmare…
Now, if you go to the Zadeh Kicks website, you will ultimately find that it is offline. Michael Malekzadeh also deleted many of his personal and business social media accounts. But, the homepage recently came back up with a message that indicated a court takeover. A court-appointed receiver named David P. Stapleton took over handling the remaining assets. Also, the FBI has turned it into a criminal investigation too!
A lot of customers have already gotten a lot of their money back through chargeback and PayPal claims. So, all people who have fallen victim to Zadeh Kicks will be able to submit a claim.
BUT, you have to note that those with orders longer than PayPal’s 180-day claim or those who paid with a debit card will be a bit more complex.
This isn’t something that should scare you out of sneaker reselling. All you have to do is put your money where sneaker reselling is reputable. Platforms that have been doing this for a long time and will probably continue for even longer. Although Zadeh Kicks had a good deal to offer, it might have been too good to be true! So, the lesson is kids, the 6 BILLION dollar industry does not stop here. Just go for better places to buy sneakers online!