There are concerns about market manipulation in the recent Yuga Labs acquisition of Meebits and CryptoPunk IP. There was a concern that several addresses purchased 159 Meebits NFTs between March 5 and March 11.
Since its acquisition by Yuga Labs on March 11, the floor price has more than doubled to over 6 ETH, which is roughly $15,000.
A bulk of the discourse appears to be centered around the seemingly suspicious acquisition of certain Meebits NFTs prior to the announcement of the deal. The NFTs had nearly doubled in value after the deal was revealed.
According to data from blockchain security firm PeckShield, 14 Ethereum addresses with no clear history of NFT purchases had bought 159 Meebits between March 5 and March 11. This occurred just before Yuga Labs said it would purchase the rights to Meebits and CryptoPunks from Larva Labs.
The news has spurred debate over whether Meebits purchases can be classified as insider trading, as NFTs are technically not considered securities. While the Securities and Exchange Commission ( SEC ) has suggested bringing NFTs under its sway , no legislation has been passed so far .
But while the Meebits deal may not be technically illegal, it has been criticized for being ethically irresponsible by Twitter users. @NFTethics has been openly talking about Larva Lab employees about the alleged market manipulation. Neither Yuga nor Lar have issued official statements on the matter.
This issue brings back speculations about market manipulation, an issue that has plagued the NFT space. The volatility of the crypto market also extends to the NFT space, which means speculators have to rely on their hunch and available public information to make profits.
None of the parties involved in the deal, Yuga Labs and Larva Labs, has made any comments about the allegations.
The lack of regulations for the industry had made it difficult to identify market manipulation. Even when uncovered, it’s near impossible to prosecute it.
This means that it’s up to NFT platforms to do something about it. Last year, Opensea banned its employees from trading NFTs listed on the platform after one employee bought a listed NFT before it became public and sold it for a profit later on.
Yuga Labs recently faced some allegations of an attempted pump and dump, with its unveiling the ApeCoin. Criticism was aimed at the fact that Yuga and its founders would still hold a majority of the token’s supply, while allowing the rest to trade on the open market.