The massive-figure purchase of CrypToadz NFT has evoked fierce talks. In this case, some consider it a human error, while others believe it is money laundering.
Tornado Cash Links Surfaces in Million-Dolar Sale of CrypToadz NFT
Seven-figure trading of a CrypToadz nonfungible token (NFT) on Ethereum was not so astonishing during the late 2021 market turmoil. However, amid considerably declining demand for NFT assets, this nature of sale is more likely to be noticeable. Today’s purchase of a CrypToadz NFT for $1.6M is evoking speculations owing to an association with Tornado Cash.
Today, CrypToadz #4030 was bought on OpenSea for 1055 Wrapped Ethereum (wETH), which is more than $1.6M. In addition to the base price, the purchaser also paid a fee of nearly $42000 worth of ETH to OpenSea. The paid amount is significantly higher compared to CrypToadz NFT’s going rate. On OpenSea, they begin at 0.53 ETH (nearly $835). The best-listed offer on that specific NFT is below 0.6 ETH ($940). Simply put, the purchaser paid more than the market rate for the profile picture initiative.
High Value Sale Linked to Fat-Finger Error
Earlier commenters on Crypto Twitter highlighted a ‘fat finger’ error involving the purchaser’s probability of zipping too quickly via the process and unknowingly paying more than required. There have been apparent instances on the other side involving sellers accepting bids less than the market price for a specific collection.
Nevertheless, some additional investigations disclose another likely answer: wash trading. In this case, another wallet transferred 1116 ETH (nearly $1.76M) to the wallet that bought the CrypToadz NFT recently. In September, the wallet got an estimated 1200 Ethereum (almost $1.9M) from Tornado Cash, an Ethereum coin mixing service.
Tornado Cash refers to an automated service that permits people to hide cryptocurrency to and from wallets by combining different users’ funds into a pool. This results in a break in the public, on-chain cryptocurrency flow between wallets, hence complicating the tracing of how Ethereum is being sent around.
US Treasury Department Imposed Sanctions Banning Tornado Cash
According to privacy advocates, Tornado Cash reduces surveillance fears when transacting cryptocurrency. However, authorities believe it is a money laundering method. The 2022 sanctions by the Treasury Department resulted in the service being banned in the U.S.
Owing to Tornado Cash’s use to transfer considerable amounts of Ethereum into the funding wallet, this might indeed be a money laundering or wash trading initiative by the purchaser. This entails utilizing a nonfungible token purchase to thwart the flow of funds between crypto assets as well as wallets.
Additionally, the utilization of Tornado Cash does not essentially mean illicit intent or actions. OpenSea failed to comment on the matter.
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