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Insider Trading in the NFT Market? Moonbirds’ Unusual Sales Activity Before Yuga Deal

The Ethereum NFT collection known as Moonbirds saw a notable surge in prices and trading volume on Friday, driven by the news of Yuga Labs’ acquisition of the collection’s intellectual property in collaboration with creator Proof.

Leading up to this announcement, there were significant spikes in sales activity, raising concerns and prompting speculation about possible insider trading.

Moonbirds NFT Trading Volume Spiked Before Yuga Deal

Data sourced from the blockchain analytics platform CryptoSlam indicates that the daily sales volume for Moonbirds NFTs remained consistently below the $100,000 mark throughout this month until February 13, with only one exception on February 4, totaling approximately $141,000.

However, on February 14, the daily sales volume surged dramatically, increasing fivefold to about $460,000, accompanied by almost four times the number of transactions compared to previous days. This heightened sales volume persisted on February 15, totaling roughly $333,000.

Following the afternoon announcement on February 16, sales witnessed another significant surge, with the current daily tally reaching approximately $3.1 million and continuing to rise.

An analysis of the project’s price floor, representing the lowest listed asset price in the collection, reflects a similar pattern of spikes in the days leading up to the Friday announcement.

On Monday afternoon, the price hovered around $2,680 worth of ETH according to data from NFT Price Floor. It began an upward trend on Wednesday, reaching $5,000 before experiencing a slight decline. However, on Friday, after the announcement, it briefly peaked at over $6,000 worth of ETH before stabilizing at approximately $5,170 at the time of writing.

Insider Trading?

Following the announcement of a deal, it’s common for asset prices to increase, but the significant surge just before the announcement has raised suspicions of potential insider trading.

On Friday, influencers, developers, and community members took to Crypto Twitter to discuss this possibility.

Cygaar, a pseudonymous blockchain developer, shared a sales/price chart for the week, highlighting the unexplained spike on Wednesday. In a sarcastic tone, he remarked, “Moonbirds chart before the Yuga acquisition tweet. Nope, definitely no insider trading here.”

Another well-known pseudonymous crypto trader and influencer, Cirrus, humorously referred to a wallet that had acquired over 150 NFTs from the Proof ecosystem in recent days as “Nancy Pelosi’s wallet,” alluding to accusations against the U.S. Representative and former Speaker of the House for trading stocks based on insider knowledge.

Cirrus also mentioned being profitable after the Yuga news.

In the past year, Nathaniel Chastain, former Head of Product at OpenSea, faced legal action when he was arrested and charged with wire fraud and money laundering related to insider trading in NFTs.

Prosecutors in New York’s Southern District alleged that the 31-year-old utilized confidential information regarding which NFTs would be showcased on OpenSea’s homepage for personal financial gain.

Chastain reportedly made over $50,000 by trading at least 45 NFTs that he knew would be featured on OpenSea’s homepage.

Subsequently, he received a three-month prison sentence for profiting tens of thousands of dollars through insider trading.

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