July 21, 2024
Unprecedented $1.6 Million NFT Sale Raises Concerns Over Money Laundering and Privacy Tactics

Unprecedented $1.6 Million NFT Sale Raises Concerns Over Money Laundering and Privacy Tactics

In the chaos of the market in late 2021, a seven-figure sale of a CrypToadz NFT on Ethereum wasn’t all that unexpected. However, such a sale today, in light of the drastically decreased market for NFT assets, is certain to be notable. Additionally, a link to Tornado Cash in today’s $1.6 million acquisition of a CrypToadz NFT is causing considerable concern.

Today, CrypToadz #4030 was bought for 1,055 wrapped Ethereum (WETH), or more than $1.6 million, on the OpenSea exchange. On top of the base purchase, the buyer also gave OpenSea a fee of over $42,000 in ETH.

The price paid is far higher than what a CrypToadz NFT would typically sell for. On OpenSea, they now start at 0.53 ETH ($835), with the best-published offer for that NFT coming in slightly higher at a little under 0.6 ETH ($940). To put it another way, the customer significantly overpaid for this profile picture (PFP) project.

Initial comments on Crypto Twitter suggested that the buyer could have rushed through the procedure and unintentionally paid much more than they had planned to due to a “fat finger” error. On the flip side, where sellers accepted bids that were much below the going rate for a particular collection, we’ve seen apparent cases of this as well.

However, a little further research reveals wash trading as a different possible solution.

As you can see, the wallet that bought the CrypToadz NFT today had just acquired around 1,116 ETH (or roughly $1.76 million) from another wallet, and that wallet had in turn gotten over $1.9 million from the Ethereum currency mixing service Tornado Cash in September.

By combining monies from numerous users into a pool, Tornado Cash is an automated service that enables users to hide the movement of cryptocurrencies to and from wallets. This disrupts the open, on-chain movement of crypto between wallets, which makes it more challenging to follow the path of ETH.

Privacy supporters claim that Tornado Cash enables them to deal in cryptocurrencies with less concern for monitoring, while law enforcement has referred to it and related applications as a means of money laundering. In the United States, the service was outlawed after Treasury Department sanctions in 2022.

This may be an effort at wash trading or money laundering by the buyer, employing an NFT purchase to further impede the movement of money between crypto wallets and assets, given the usage of Tornado Cash to channel substantial quantities of ETH into the funding wallet. However, using Tornado Cash does not indicate unlawful behaviour or malicious intent.

Image: Wallpapers.com

Disclosure Statement: Miami Crypto does not take any external funding, or support to bring crypto news to the readers. We do not have any conflicts of interest while writing news stories on Miami Crypto.

Related posts

Magic Eden Makes Waves: Unveiling a New Era in Ethereum NFT Marketplaces

Eva Moore

Base Blockchain Mints Inaugural NFT Single

Christian Green

January Surges: NFTs Leave Ether in the Dust with Impressive Gains

Anna Garcia

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More

Please enter CoinGecko Free Api Key to get this plugin works.