Yuga Labs accused of market manipulation after buying NFT collections
The crypto community accuses Yuga Labs of market manipulation after buying the CryptoPunks and Meebits collections. Blockchain Security has revealed that 14 ETH addresses bought 159 Meebits before Yuga Labs officially announced the sale.
Yuga Labs faces allegations of market manipulation after acquiring CryptoPunks and Meebits from Larva Labs. The deal resulted in an increase in revenue from CryptoPunks and Bored Ape, with NFTs increasing in value by almost 200 percent. The creator of Bored Ape is said to have acquired certain Meebits NFTs through questionable means prior to the official deal.
The online discourse revolves around erratic pre-takeover trading activity. Prior to the acquisition announcement, PeckShield data said 159 Meebits NFTs had been acquired. The transactions occurred across 14 Ethereum addresses between March 5 and March 11, all of which have an unknown history of NFT purchases. According to Etherscan, the top address bought a total of 24 Meebits on March 5.
Not the first allegation against Yuga Labs
Recently, Yuga Labs has also faced allegations of an attempted pump-and-dump, one of the classic crypto scam schemes. The Bored Ape Yacht Club NFT collection announced the launch of a new token, ApeCoin (APE), for use in the BAYC ecosystem. Yuga claimed it would yield 15 percent of the total APE supply to BAYC holders. The creator of Bored Ape also mentioned that the “Ape Foundation” was established to oversee the token. In addition, 62 percent of the total APE supply would go to the community and a decentralized organization would manage it. The suspicion that Yuga Labs and its founders were manipulating the public with open trading while keeping much of the token supply to sell at an inflated price caused discontent.
The crypto marketplace has been the talk of scams since its inception. But that’s just one example. The lack of regulation of cryptocurrencies has often led to fraudulent gains in the industry. The value of NFTs has increased tremendously over the past year. Crypto traders are believed to be buying and selling the same asset to give the false impression of high demand. US officials are unsure whether the existing regulations are a solid guide to cryptocurrency rules. IT lawyer Darren Heitner recently said:
“There is currently some uncertainty as to whether some of these NFT products are incorrectly unregistered as securities.”
Is the allegation pure speculation?
Last year, CryptoPunks and Bored Ape topped the list of NFTs with the highest price and market cap. During the acquisition, CryptoPunks owners expected Yuga Labs to perform better than Larva Labs. Clearly, the stakes are higher for Yuga Labs than jeopardizing its business for a few NFTs. Yuga Labs’ allegation of market manipulation does not necessarily mean that the purchase of the NFTs was illegal. It could have been good timing by the buyers or traders who bought on impulse based on information. However, the anonymity of ETH addresses makes it difficult to ascertain.
If the market manipulation is an external attempt, Yuga Labs may want to improve trading conditions for its collections. Neither Larva Labs nor Yuga Labs have commented on the allegations.