LooksRare Team Caught Cashing Out $30M as LOOKS Token Tumbles 15%

LooksRare has admitted to cashing out $30 million in Ether after eagle-eyed NFT traders tracked the $LOOKS token trading activity to another platform, Tornado Cash.
Image source: looksrare.org

Last Updated on July 31, 2022

Quick take:

  • The LooksRare NFT marketplace team has admitted to cashing out $30 million in Ether.
  • Eagle-eyed NFT traders tracked the trading activity of the $LOOKS token to a zero-knowledge platform Tornado Cash.
  • Their admission did not prevent backlash from fans who accused the team of hypocrisy, resulting in a 15% decline in $LOOKS price.

Highly-hyped non-fungible token (NFT) marketplace LooksRare is facing its first major backlash from its fans after its team was caught cashing out millions in Ether. The $LOOKS token tumbled more than 15% within hours as the news broke, before extending declines to more than 30% on Monday.

The team admitted to selling $30 million worth of the unattributed staked $LOOKS token after one NFT trader claimed the platform had sold $95 million worth of the token on the zero-knowledge (ZK) token trading marketplace Tornado Cash.

LooksRare’s utility token was marketed as the NFT marketplace’s way of rewarding users for buying and selling NFTs. Besides the slightly lower gas fees compared to OpenSea, NFT whales and wash traders were particularly attracted to the platform because of its rewards system that offered users the LOOKS token.

Although LooksRare dominated NFT trading volume over the last five weeks, OpenSea is slowly clawing back its position as per Dune Analytics data by @hildobby. LooksRare has witnessed a massive decline in transaction volume over the last few days.

Image source: Dune Analytics/@hildobby

Although the platform accepted its core team had sold 10,500 WETH, worth about $30 million, the community did not hold back, accusing the team of hypocrisy.

One user was particularly quick to point out that the core team could have been more transparent rather than trying to use the Ethereum based token trading platform Tornado.

Replying to the conversation about the expose on Twitter, SOLMiningPunks wrote:

“So why tornado it? Seems like you kinda got caught cashing out and now damage control.”

A LooksRare team member Zodd said the platform attributed 80,000 WETH among LOOKS stakers over the last 30 days, assuring the fans that the platform is not going anywhere, also denying that the project may be a rag pull.

The team member tried to justify the $30 million cash-out saying that the platform has 10 full-time staff, who had not received payment for six months.

However, another platform user cryptoaussie007 was quick to push back, writing:

“Love that you address this like “we haven’t been paid for 6 months.” So each team member just cashed out over 3 million USD (for 6 months’ work) leaving the public bag holders broke with a shitty chart like this? Joke…. community-driven lol. Another crypto sad joke tbh.”

The community asked the team to purchase back the $LOOKS token rather than cashing out ETH. 

The $LOOKS token has since bounced back 9% over the last 24 hours after plummeting significantly on Monday. As of this writing, it was down about 14.7% from Sunday’s price.

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