Cryptoasset Anti-Financial Crime Specialist (CCAS) Certification Practice Test

In an investigation of artificial price pumping of NFTs, what does a common address in all sales likely represent?

1. The original NFT artist receiving royalties

2. A transaction fee for processing sales

3. A laundering service fee

4. Automatic sales tax enforced by the marketplace

The correct answer is: The original NFT artist receiving royalties

In the context of investigating artificial price pumping of NFTs, a common address appearing in all sales typically indicates a direct connection to the original NFT artist. When an artist receives royalties from the sale of their NFTs, it is common for a percentage of the sales price to be sent to a specified wallet address that represents the artist or their established revenue stream. This is especially relevant if multiple sales are reported to that address, suggesting that the artist is profiting from inflated prices driven by coordinated efforts in the market. The presence of this common address across several transactions can indicate a pattern of behavior where the artist may be attempting to manipulate the market perception of their NFTs by artificially inflating prices, aiming to create a sense of value or demand. This can be part of a broader scheme in the NFT space, where certain artists or groups might engage in manipulative practices to enhance their reputation and sales figures. The other options point towards various financial mechanisms in the trading of NFTs but do not align with the distinctive nature of identifying an original creator. Transaction fees are typically separate and do not involve a uniform address across sales. Similarly, a laundering service fee and automatic sales tax are mechanisms that do not specifically point to the primary artist but rather to third-party financial activities or marketplace policies