The famous NFT collection CryptoPunk NFT, which consists of various pixelized people called Punks, has shaken the world many times with outrageous multimillion-dollar stores. Another $ 532 million deal appeared only recently, but it was clearly not a natural purchase but a well-thought-out scam.
NFT for $ 532 million
The rare NFT green-eyed character CryptoPunk 9998 has sold over $ 500 million. The problem, however, is that the money the seller received returned to the buyer. This operation raised a number of issues throughout the NFT industry. On Thursday, someone used address 0xef76 to transfer CryptoPunk 9998 to wallet 0x8e39. Immediately afterwards, address 0x8e39 was sold by the NFT to a new address, 0x9b5a, for the $ 532 million they had borrowed from the Compound platform.
– CryptoPunks Bot (@cryptopunksbot) October 28, 2021
The payment itself was made on CryptoPunk smart contracts and then made to the seller, which is part of the normal process of selling and buying NFT. However, immediately after the transaction, the address of the seller sent approximately 120,000 ETH back to the buyer. The icing on the cake was the transfer of this NFT back to the original address 0xef76, which originally held CryptoPunk 9998. Immediately after regaining its own NFT, this address decided to pump up the price of digital art at $ 1 billion.
Well thought out scam
Basically, it was not a scam in the true sense of the word. Nobody stole anyone. The main scam is that the price of this NFT has been artificially pumped, which can confuse a potential buyer and he may be willing to pay more than the real value of this NFT because he sees that someone has paid a huge amount to buy it.
The point of this scheme was simple – to borrow funds, use them to buy your own NFT, transfer funds back and repay the loan, and then increase the price of your NFT because the trade between the two wallets is already recorded in the transaction history. The developer of CryptoPunks said on Twitter that they will now filter this type of transaction to avoid generating spurious signals. Because price is the first thing investors will see when considering buying or selling such digital art. In the traditional structure of a regulated market, such a case would be considered illegal due to “wash trading” and the creation of artificial demand for the asset.