- February 18, 2024
- Posted by: [email protected]
- Category:
The Ethereum-based NFT collection Moonbirds witnessed a remarkable surge in both prices and trading volume on Friday, sparked by the revelation of Yuga Labs’ acquisition of the collection’s intellectual property and collaboration with its creator Proof. While this announcement brought substantial attention and value to Moonbirds NFTs, concerns have arisen over potential insider trading due to unusual sales activity in the days leading up to the disclosure.
A thorough investigation by the blockchain analytics platform CryptoSlam offers a revealing picture. Throughout this month until February 13, Moonbirds NFTs consistently recorded daily sales volumes below $100,000, with a solitary exception on February 4, totaling approximately $141,000. However, on February 14, daily sales volume surged fivefold to about $460,000, accompanied by nearly quadrupling the number of transactions observed previously. This elevated sales volume persisted on February 15, totaling roughly $333,000. Following the afternoon announcement on February 16, sales skyrocketed even further, with the current daily tally reaching approximately $3.1 million and continuing to rise.
A closer examination of the project’s price floor, representing the lowest listed asset price in the collection, reveals a similar pattern of spikes in the days leading up to the announcement. Starting at around $2,680 worth of ETH on Monday afternoon, the price began a steady climb on Wednesday, reaching $5,000 before a minor decline. However, on Friday, post-announcement, it briefly peaked at over $6,000 worth of ETH before settling around $5,170 at the time of writing.
While price surges post-announcement are not uncommon, the significant uptick preceding the revelation raises eyebrows and fuels suspicions of potential insider trading. Crypto influencers, developers, and community members took to Crypto Twitter to voice their concerns. Pseudonymous blockchain developer Cygaar shared a sales/price chart for the week, sarcastically highlighting the unexplained spike on Wednesday before the Yuga Labs acquisition tweet.
Cirrus, a pseudonymous crypto trader and influencer, humorously referred to a wallet that accumulated over 150 NFTs from the Proof ecosystem in the days leading up to the announcement as “Nancy Pelosi’s wallet.” This playful allusion references accusations against the U.S. Representative regarding insider stock trading. Cirrus also mentioned being in profit after the Yuga news.
This situation raises genuine concerns about potential insider trading within the NFT market. Last year, Nathaniel Chastain, former Head of Product at OpenSea, faced legal consequences for insider trading in NFTs. Charged with wire fraud and money laundering, Chastain profited by trading NFTs he knew would be featured on OpenSea’s homepage. His case serves as a cautionary tale, emphasizing the need for transparency and ethical conduct within the rapidly evolving NFT ecosystem. As regulatory scrutiny intensifies, the crypto community remains vigilant, calling for fair practices and integrity in market activities.
