CrypToadz NFT Trades for $1.6 Million Stirring Suspicions of Wash Trading
Summary:
A CrypToadz NFT, usually worth less than $1000, was recently bought for an astounding $1.6 million on the OpenSea marketplace. The unusual purchase, made with funds from a digital wallet linked to Ethereum coin laundering service Tornado Cash, raised suspicions in the community. While it could be a mistake, it also could represent a case of wash trading, a method used to withdraw potentially illicit funds via a series of transactional exchanges.
A CrypToadz non-fungible token (NFT), normally valued at no more than $1000, was recently sold for a staggering 1,055 Wrapped Ethereum (WETH), equating to $1.6 million. This transaction was made on the OpenSea marketplace on October 9. The digital piece, which portrays a "lumpy, water-dwelling creature," is one among the 6969 pieces created by the anonymous digital creator Gremplin. Having debuted in the NFT upsurge of 2021, the CrypToadz series amassed an impressive 12,000 ETH ($38 million) in traded volume in its first ten days on the market. The buying wallet obtained funds from a wallet which had been withdrawing from Tornado Cash.
Nonetheless, the unexpected high price paid by the unidentified buyer for this NFT sparked uncertainty within the sector. A fortnight ago, the item was bought for 0.95 ETH (approximately $1600), only to be resold at a price that was a thousand times steeper. Related: North Korean Lazarus Group stockpiles over $40M in Bitcoin, data discloses. Furthermore, the funds for the purchase originated from a digital wallet, which is part of a sequence of transactions anonymized by the Ethereum coin laundering service Tornado Cash. The recent purchaser of the CrypToadz NFT obtained 1,115.9 ETH ($1.6 million) on October 5.
While some on Twitter chalked up the bizarre purchase as a clumsy error during the transaction process, this could also potentially exemplify wash trading, a strategy used to extract funds of dubious origin through a lengthy sequence of dealings and trade-offs. Tornado Cash is notorious for its allure to scammers looking to launder their money. In August 2023, even the United States Office of Foreign Assets Control (OFAC) imposed sanctions on the crypto mixer for its suspected involvement in laundering proceeds from criminal activity. Despite this, the sanctions were unable to fully halt usage of the mixer. For instance, around $60 million in Ether, taken from AnubisDAO two years prior, was transported via Tornado Cash in July 2023. The individual who had control of the 13,556 ETH separated and moved the funds within 100 ETH transactions. Magazine: The Uncensored Truth of Cuba's Bitcoin Revolution: An eyewitness account.
Published At
10/10/2023 8:14:21 AM
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