User Error Sees $500,000 Pudgy Penguins NFT Trade Loss

An unknown Pudgy Penguins NFT collector has sold 5 of his NFTs – worth well over $500,000 USD – for just $35 USD each, yielding a loss of half a million dollars.

Taking place in the early hours of December 31, reactions from the community initially suspected that the user had failed to double-check which currency was being used for the sale. Each NFT was listed for 35 USDC, whereas 35 ETH would have been a high price, but a much more realistic figure.

Suspicion quickly arose when it was found that all five NFTs were snapped up by the same buyer. Rumours suggest that this wallet could also be owned by the seller, with the sale being evidence of tax loss harvesting, ahead of the end of 2024.

How expensive are Pudgy Penguins NFTs?

As of writing, the floor price of Pudgy Penguins NFTs sits at 21.5 ETH (over $70,000 USD) – though it is believed the 5 NFTs sold here are worth far more.

Pudgy Penguins have their own in-house marketplace, and NFTs with similar traits to the five sold here have either been listed or sold at, or are deemed to be, more valuable than those at the floor.

The Pudgy Penguins NFT collection is currently the second most valuable NFT avatar collection. Pudgy Penguins surpassed Bored Ape Yacht Club for the first time earlier in 2024, and took a firm hold of the #2 spot following the launch of the $PENGU token.

That leaves Pudgy Penguins NFTs only trailing behind CryptoPunks, who sit at a floor price of 37.25 ETH (over $125,000 USD) as of writing.

Is this a mistake, or suspicious activity?

Though these trades could simply be a very costly error, there’s numerous reasons to suggest that it is instead deliberate, and perhaps suspicious.

Each NFT was sold for 35 $USDC one after the other over a 10-minute period – meaning if it was a mistake, it would have been a series of 5 back-to-back errors, rather than a single big mistake. All five NFTs were sold to the same wallet too, which would seem unlikely given the circumstances.

Once news of the trades hit X, many alternative theories rose as to the nature of the transactions. Some believed it to be tax loss harvesting – creating big losses to avoid large tax payments – whilst others believe that money could have exchanged off-chain, with the on-chain transactions only being token payments.

Whatever the truth is, there’s no doubt the trades have shown the NFT community to be alive and kicking as 2024 draws to a close.