Two major NFTs have sold for way below their market value, sparking speculation as to whether the transactions were the result of user error or malicious intent.
On March 28, many fans of Bored Ape NFTs noticed one of the NFTs from the collection had sold for only $115. At the time of the sale, the lowest priced Bored Ape NFT was selling for around $350k.
Moments later another major NFT known as Mutant Ape went on sale from the same account for only $25. Mutant Ape NFTs at the time had a floor price of $76k.
Cryptocurrency communities on Twitter and Reddit were quick to post these NFT transactions but the reasons for their low sale price is still a mystery. Many believe this is a result of user error and a costly mistake from the seller.
While these mistakes have happened in the past, many are skeptical because multiple NFTs were sold below current values. Prior mistakes of this nature only involved a single NFT and the seller usually went public about their mistake.
Others believe this is the result of wash trading or an attempt to avoid taxes. As NFTs are considered investments, a user selling an NFT for a loss could be trying to offset taxes. This rumor has grown in significance as it was later realized that one wallet purchased both of these low priced NFTs.
The same user purchasing both NFTs is not quite a major red flag. Many bots are created which continuously search NFT marketplaces for mistaken listings and purchase NFTs which are below the current floor price.
Oddly enough, these transactions required the seller to first confirm the sale before the transaction happened. Neither NFT has been relisted for sale.
Typically when a bot manages to purchase an NFT for under floor value, the NFT will immediately be listed again for a higher price. Both of these NFTs are still sitting in the same wallet.
Tax avoidance through NFTs has been a growing issue within governments. The UK was the first government to seize NFTs which were used as part of tax avoidance. Many governments believe digital currencies and NFTs are being used to launder illegal funds. Due to this growing fear from tax agencies, it is likely these NFTs transactions will be under the spotlight.