Everybody is jumping into the trend of NFTs, even the former First Lady. Melania Trump’s NFT, tied to a hat she wore at the White House, sold for $170 000, which is a massive sum for a digital asset. The controversial part of the deal came when crypto experts tracked the movement of money and noticed that the funding came from a second wallet, which the seller funded.
The transaction seems to suggest that the NFT was either bought by Melania Trump herself or by the creators of the NFT.
The NFT in question is tied to the occasion of the French President visiting the White House in 2018. The digital asset is connected to a watercolor painting of her waiting for a hat. The sold NFT is part of Melania’s more prominent digital presence.
Last year she launched a website where digital pieces are auctioned. The use of NFTs means that each transaction is recorded in the Blockchain. Melania Trump’s website itself published the address of the person who had the winning bid, which allowed curious users to track where the money came from and where it was going.
The first analysis came from MotherBoard, which found out that the last address had been funded by an intermediate address that the original creator of the NFT had in turn funded.
It concluded by saying, “In other words, the winner of Melania Trump’s NFT got the money from none other than the creator of the NFT itself, and an address linked to the NFT creator got the money back,”
Melania’s office defended the former First Lady by saying that “The nature of Blockchain protocol is entirely transparent” and that “Accordingly, the public can view each transaction on the Blockchain. The transaction was facilitated on behalf of a third-party buyer.”
Some crypto enthusiasts were upset with Melania Trump’s attempt to artificially inflate the price of her own NFT, which is a common practice in marketplaces. Trading with yourself or with partners means you can inflate the prices or make others feel like they are receiving a discount when the asset is sold to an oblivious investor.
Carly Reilly, the creator of the Overpriced JPEGs podcasts, says, “So I guess that the Trumps are trying to save face by avoiding a super cheap sale and controlling the sale price themselves, and trying to up the future value of Melania’s NFTs by creating an artificially high benchmark price.”
The practice of “wash trading” is banned in other marketplaces. However, since NFT marketplaces are still emerging, regulation is slow, and platforms often don’t have the resources or lack the motivation to enforce the rules strictly.
