Yuga Labs, the owner of the Bored Ape NFT collection, has been criticized by the crypto community for market manipulation for its recent purchase of the CryptoPunks and Meebits collections. The majority of the criticism appears to be focused on the questionable purchasing of specific Meebits NFTs prior to the deal’s announcement. After the purchase was exposed, the NFTs roughly doubled in value.
Yuga Labs NFT collections
Yuga now owns the rights to the top two NFT collections, Bored Ape Yacht Club and CryptoPunks, thereby making it the largest business in the NFT industry. The two collections are worth around 1.4 million ETH.
Given that NFTs are theoretically not considered securities, the disclosure has sparked debate as to whether the Meebits acquisitions may be characterised as insider trading.
NFTs remain in a legal limbo
The Securities and Exchange Commission (SEC) has hinted at putting NFTs under its jurisdiction, although no legislation has yet been approved. Meebits agreement isn’t strictly unlawful, Twitter users have criticized it for being unethical. Larva Lab staff have been chastised by @NFTethics for allegedly manipulating the stock market. Yuga and Larva haven’t made any public remarks on the situation.
Market manipulation isn’t new to crypto
A large portion of crypto legislation aims to safeguard investors from such frauds. Last year, China formally outlawed cryptocurrency, claiming a huge number of frauds.
With the launch of the ApeCoin (APE) token, Yuga Labs was accused of attempting a pump and dump. The notion that Yuga and its creators will retain a portion of the token’s supply while enabling the balance to sell on the open market drew criticism.
APE’s initial trading experience had been marred by violent price volatility.