NEW YORK (Bloomberg) – An online uproar surrounding the unregulated trading of a non-fungible token (NFT) collection prior to the project’s acquisition is shining light again on a perceived lack of regulatory clarity in one of crypto’s most explosive corners. ,
In the days before Yuga Labs purchased the intellectual property of the MeBits collection from Larva Labs on March 11, more than a dozen addresses purchased large amounts of NFTs on the Ethereum blockchain. NFTs are the key to owning digital assets.
According to the NFT price floor, the price floor, or the lowest price that sellers are willing to accept, reached 6.134 Ether, or US$15,800 (S$21,400) on March 12th. This is almost double what it was two days ago.
Whether it’s just good times or someone acting off information, legal observers said it can be hard to quantify due to the anonymous nature of crypto and the vague regulatory framework surrounding NFTs.
United States officials have said that the current regulations set a solid precedent for the regulation of cryptocurrencies.
Darren Hetner, an intellectual property attorney in Fort Lauderdale, Florida, said in an e-mail message, “There is currently considerable uncertainty as to whether some of these NFT products are not registering improperly as securities. “
Officials of Larva Labs could not be reached on social media contacts seeking comment. Yug Labs did not respond to requests for comment.
The unregulated world of digital collectibles has been crushed by speculation insiders who are making huge profits from the industry’s wild valuation swings. The prices of several NFTs have risen over the past year as collections such as Cryptopunks and Puddy Penguin attracted an influx of speculative cash.
It has also been a victim of speculation that traders buy and sell the same asset to create the illusion of increased demand, known as wash trading.
Last year, major NFT marketplace OpenC banned employees from trading NFT collections promoted by the platform and used confidential information to trade, after it was found that an employee had accessed OpenC’s home page. Had traded some items before appearing on it.
In this latest example, the Twitter account @NFTethics excluded people who bought Meebits before the deal was announced. Still, speculation about the transaction was widespread on Twitter and messaging platforms such as Discord, hours before the acquisition was announced.
Based on data compiled by blockchain security firm PeckShield, 14 Ethereum addresses, with no previous history of mainstream NFT collection purchases, bought 159 Meebits between March 5 and March 11. The top address, as shown on Etherscan, bought 24 Meebits at once in March. 5.