User error leads to $500,000 Pudgy Penguins NFT trading loss

An unknown Pudgy Penguins nft collector sold 5 of his nfts, worth over $500,000, for just $35 each, resulting in a loss of half a million dollars.

In the early hours of December 31, community reactions initially suspected that the user had not verified which currency was being used for the sale. Each nft was listed for 35 USDC, while 35 eth would have been a high price, but a much more realistic figure.

Suspicions quickly arose when it was discovered that all five nfts were purchased by the same buyer. Rumors suggest that this wallet could also be owned by the seller, and the sale is evidence of tax loss harvesting, before the end of 2024.

How expensive are Pudgy Penguins nfts?

At the time of writing, the minimum price for Pudgy Penguins nfts stands at 21.5 eth (over $70,000), although the 5 nfts sold here are believed to be worth much more.

Pudgy Penguins has its own internal marketplace, and nfts with similar characteristics to the five sold here have been listed or sold, or are considered, more valuable than those on the floor.

The Pudgy Penguins nft collection is currently the second most valuable nft avatar collection. Pudgy Penguins overtook Bored Ape Yacht Club for the first time in early 2024 and firmly took over the No. 2 spot following the launch of the $PENGU token.

That leaves Pudgy Penguins nfts behind only CryptoPunks, which have a minimum price of 37.25 eth (over $125,000 USD) at the time of writing.

Is this a bug or suspicious activity?

Although these trades could simply be a very costly mistake, there are numerous reasons to suggest that they are instead deliberate and perhaps suspicious.

Each nft was sold for 35 $USDC one after the other over a 10 minute period, meaning that if it was a mistake, it would have been a series of 5 consecutive mistakes, rather than one big mistake. All five nfts were also sold in the same wallet, which would seem unlikely given the circumstances.

Once news of the transactions reached x, many alternative theories regarding the nature of the transactions emerged. Some believed this was tax loss harvesting (creating large losses to avoid large tax payments), while others believe the money could have been exchanged off-chain, with on-chain transactions being only token payments.

Whatever the truth, there is no doubt that trading has shown that the nft community is alive and well as 2024 comes to a close.