A Tribe Called Quest royalties were sold with an NFT. The group never OK’d it.

The NFT grants the owner a perpetual 1.5 percent royalty from the rap group's first five albums.

NEW YORK, NEW YORK--SEPTEMBER 01:  Ali Shaheed Muhammad, Phife Dawg (aka Malik Izaak Taylor) and Q-T...
Al Pereira/Michael Ochs Archives/Getty Images

Experimental rap group A Tribe Called Quest says an NFT granting the buyer royalties for its first five albums was unauthorized. The sale was hosted last week by Royalty Exchange, and the final auction priced closed at 40.191 ethereum, or about $85,000.

“No member of A Tribe Called Quest has entered into any partnership with Royalty Exchange. PERIOD!” wrote Tribe DJ and producer Ali Shaheed Muhammad in a post on Facebook.

Shady — Muhammed went on to say that the 1.5 percent royalty included with the NFT came from PPX Enterprises and Ed Chaplin, who used to be Tribe’s representative at Jive Records. Part of the royalty traded hands and made its way to someone who works at Royalty Exchange. “Had we known this percentage of our art was out there we would have bought it directly from PPX Enterprises as it should have never been sold by Jive Records.”

When the sale for the NFT went live, Billboard wrote an article implying the group had partnered with Royalty Exchange on the auction. Billboard has since corrected its story.

The NFT from Royalty Exchange included royalties as well as this graphic art.Royalty Exchange

Digital collectibles — Normally, on the web, a piece of art like a picture or video has no inherent value because it can be infinitely replicated. NFTs, or non-fungible tokens, are essentially digital collectibles that cannot be modified or replicated. Using blockchain technology, a cryptographic key is created that’s recorded on a ledger; its ownership can be tracked as it changes hands. The immutable nature of NFTs is supposed to give them value through rarity. Only one person can own a piece of artwork that’s been signed by its creator using NFT technology.

Some legitimate organizations like the NBA have adopted NFTs to sell collectibles, like clips from league games. NFTs can be programmed so that the owner receives unique benefits, as is the case with the royalties in the Tribe NFT.

NFTs have boomed in recent months as a new way for artists to make money online. But the debacle with Tribe isn’t the first NFT sale of a dubious nature. In the largest NFT sale on record, digital artist Beeple nabbed $69 million for a .JPG file when it sold to an entrepreneur who was adding to an art collection that others could buy ownership stakes in. Beeple held an ownership stake in the fund that could see him earn even more money.

Shady sales are nothing new in the art world. But NFTs are a novel concept and these situations could hinder adoption if potential buyers raise doubts about what they’re getting. Proponents of NFTs hope that smaller name artists will be able to use the technology to make a more sustainable income.