In a recent development, the attention of crypto Twitter has been captured by a string of transactions that occurred on the Blur NFT marketplace. The transactions have raised questions of legality after a creative trader with the name, Hanwe Chang, deceived a competitor into purchasing specific Azuki NFTs at an inflated price.
A Highly Controversial Transaction
Despite being a newcomer in comparison to other popular NFT marketplaces such as SuperRare and OpenSea, Blur has grown ahead of others in terms of trading volumes earlier this year, partly due to the gamified incentives that reward participants with tokens according to trade-based activity.
This includes rewards in the form of an airdrop offered to users that bid on Non-Fungible Tokens (NFTs) by trait, a practice which, according to Blur’s leaderboards, has been mastered by Hanwe Chang.
As a result, bidding on Blur has become a popular way to rack up points, increasing the possibility of getting a high airdrop payout. Some traders have gone as far as developing bots to help them place automatic bids by copying other traders’ bids, something that Chang noticed and took advantage of.
While reporting the transactions on Twitter, Chang stated that he “noticed that someone’s bot was copying my bids on Blur,” so he had an idea to actually trick the bots into bidding for NFTs at a huge markup. He also mentioned that using the strategy, he was able to make 800 ETH with a value of about $1.5 million.
Chang started bidding on his own NFTs at 10x higher than their normal price, an action that the bot automatically copied. Once the bots placed identical bids on Chang’s NFTs, the trader accepted all of the bids, netting 800 ETH in profit from 12 Azukis in a matter of minutes.
According to Etherscan, a huge chunk of trades’ profits was then transferred to a wallet tagged as “hanwe.eth” on the Ethereum Name Service after trades were completed.
Total market falls deeper into the red | Source: Crypto Total Market Cap on Tradingview.com
NFT Twitter Reacts
The nature of the transaction has sparked a reaction among members of crypto Twitter. One NFT influencer who goes by Dave III, said Chang’s statement was not very wise and cautioned others to avoid bragging “…about committing fraud,” calling Chang’s trick “illegal market activity.” According to him, the illegal aspect of Chang’s activity was the part where he placed bids he wouldn’t accept just to “trigger other bids.”
Another NFT influencer who goes by A Raving Ape, further described the transaction as “an epic case on PvP” in the NFT marketplace. PvP (player versus player) is a popular term that is related to confrontations in multiplayer video games. However, in this situation, it appears that everyone involved was entertained.
The victim of the heist and owner of the bot “elizab.eth” later stepped forward on Twitter, saying that the “funds were stolen from (their) bot.” The account posted that it was willing to discuss the possibility of a bounty and stated that Chang was welcome to keep 10% of the funds if they could return the rest.
However, while other commentators were against the idea of illegality, simply stating that elizab.eth was only outwitted, others like Delphi Labs General Counsel Gabriel Shapiro seem more sympathetic. He, however, noted that while the bot’s owner appeared to have excellent legal claims to reclaim their ETH, the question of legality was “a bit more nuanced.”
While the arguments on the legality/morality of Chang’s actions continue, the trader has not responded to any of this. In fact, Chang has been inactive on his Twitter account since he posted about the trades.
Featured image from Chain Witcher, chart from Tradingview.com