Did Melania Trump Buy Her Own NFT?

Wren Graves
·3 min read
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The post Did Melania Trump Buy Her Own NFT? appeared first on Consequence.

Melania Trump auctioned off an NFT last month for about $170,000, but as Vice reports, the funds for the winning bid came from the same crypto wallet that created the NFT. So did the former First Lady buy her own NFT? And if not, what happened?

Trump first got into selling NFTs, or non-fungible tokens, last year. Her latest auction involved the “Head of State Collection, 2022”, which included an NFT, a water color, and a white broad-brimmed hat that she wore for a visit from French President Emmanuel Macron in 2018 (pictured above).

The sale took place three weeks ago on the Solana blockchain for 1,800 SOL (about $182,000 today, but closer to $170,000 last month). As The New York Times reported at the time, this was significantly below the $250,000 that Trump had been seeking. Furthermore, interest in the package seemed low; there were only five bids, and they all came in around the minimum.

Eventually, a minimum bid of 1,800 SOL was accepted. This is where things get weird.

Solana is a public blockchain, with every transaction linked to an address and no way to delete records. If you follow the money, you’ll find that the cryptocurrency from the winning bid came from a wallet funded by the same address that created the NFT.

Vice explained it thus: “The auction winner’s address was funded with 1,800 SOL on January 25, which came from an address (let’s call it Address X) that was itself funded by the address that created Melania’s NFT. After the auction, the NFT creator address sent 1,800 SOL back to Address X which converted it into USDC, a stablecoin pegged to the U.S. dollar.”

Trump’s office offered an explanation, releasing a statement saying, “The nature of Blockchain protocol is entirely transparent. Accordingly, the public can view each transaction on the blockchain. The transaction was facilitated on behalf of a third-party buyer.” They did not elaborate on who this mystery buyer might be, but the story suggests that a person who doesn’t use crypto paid Trump in some other way.

This is conceivable. Someone, perhaps a wealthy backer of her husband, wanted to support Melania’s endeavor without getting bogged down in crypto details. Perhaps they paid close to the original asking price of $250,000, and in response Trump closed out the auction with her own bid.

But this hardly clears up the mystery. First, why would someone who apparently does not own cryptocurrency want to purchase this crypto asset? And even if that is the case, why did the transfer of funds between two wallets involve a third middle wallet — Address X? If the explanation is really that simple, why make the transaction so complicated?

This kind of rigamarole is not uncommon in the crypto community, and the usual explanation is wash trading. Illegal in regulated markets like the stock exchange, wash trading is the act of using brokers to buy and sell assets to oneself, making it look like those assets are worth a certain price to influence future trading.

Wash trading is not illegal on cryptocurrency exchanges. If this is what Trump was doing, then she probably had no legitimate bids on the NFT, and instead wanted to make it look like the token was 1,800 SOL. That way, future attempts to sell the token will be buoyed by the previous sale, and any new NFTs created by the former First Lady may attract more attention.

We may never know what happened, and whether the sale was actually sketchy or merely confusing. One thing is certain: Cryptocurrency has attracted a wide variety of scam artists, some of whom have been caught (the rapper and her husband who stole $4.5 billion in cryptocurrency), and some have not (the scammers who stole thousands from Ozzy Osbourne fans trying to buy CryptoBatz NFTs). Buyers beware.

Did Melania Trump Buy Her Own NFT?
Wren Graves

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