In an intriguing transaction on the OpenSea platform on October 9th, an NFT from the CrypToadz collection was acquired for a stunning 1,055 Wrapped Ethereum (wETH), equivalent to $1.6 million. Typically, CrypToadz NFTs, representing eccentric amphibians designed by digital artist Gremplin, don’t exceed $1,000. The collection, born during the NFT boom in 2021, recorded an impressive trading volume of 12,000 ETH, or about $38 million, in its first ten days.
Gripping Transactions and Potential Money Laundering
What truly astounded the crypto community, however, is the drastic disparity in price. Just fifteen days earlier, this same NFT had been sold for 0.95 ETH, or about $1,600. This recent transaction, reflecting an inflated price a thousand times higher, naturally raised skepticism. Additionally, the seller hesitated to pay over $40,000 in fees for this sale, ensuring that the transaction would be validated as quickly as possible without anyone else attempting to snatch the enticing offer.
Transactions Concealed and Potential Money Laundering
Diving deeper into the mystery, the payment for this NFT originated from a wallet, the traces of which were obscured by the renowned Ethereum mixer, Tornado Cash. This service is notorious for its appeal to those seeking to obfuscate transaction traces, possibly for dubious purposes. Records show that on October 5th, the new owner of the CrypToadz NFT received a substantial sum of 1,115.9 ETH, or $1.6 million.
While some Twitter observers classified this unique trade as a probable ‘fat finger’ error, others speculate that it could be indicative of wash trading. This technique involves creating a complex network of transactions, usually to launder funds of dubious origin or evade taxes.
Further bolstering the latter theory, the reputation of Tornado Cash is somewhat tainted. The US Office of Foreign Assets Control (OFAC) imposed sanctions on the platform in August 2023, citing its alleged involvement in money laundering. Despite these sanctions, crypto mixer activities continue unhindered, as evidenced by an incident in July 2023, where nearly $60 million in Ether, misappropriated from AnubisDAO two years prior, was routed through Tornado Cash.
