CryptoEdge NFT linked to Tornado Cash sells for $1.6 million in Ethereum

Seven-figure sales of Cryptodz NFTs on Ethereum during the market turmoil of late 2021 weren’t exactly surprising. But such sales would certainly emerge today amid significantly weaker demand for NFT assets. And today’s $1.6 million purchase of a CrypToadz NFT is also raising some red flags, thanks to its connection to Tornado Cash.

CrypToadz #4030 was purchased today on the OpenSea marketplace for 1,055 Wrapped Ethereum (WETH), or over $1.6 million. The buyer also paid OpenSea a fee for approximately $42,000 worth of ETH on top of the base price.

The amount paid is dramatically higher than the normal rate for CrypToadz NFTs. Currently, they start at 0.53 ETH (about $835) on OpenSea, with the best listed offer on that particular NFT coming down to just over 0.6 ETH ($940). In other words, the buyer paid significantly more than the market rate for this profile picture (PFP) project.

Initially, crypto Twitter commentators pointed out A “fat finger” mistake-That the buyer may have rushed through the process and accidentally paid more than expected. We have also seen clear examples of this on the other side, where sellers have accepted bids that were well below market value for a particular collection.

However, a little more digging reveals another possible answer: wash trading.

See, the wallet that purchased the CrypToadz NFT today was recently funded with approximately 1,116 ETH (about $1.76 million) from another wallet – and that wallet was funded with approximately 1,200 ETH from Ethereum coin mixing service Tornado Cash in September. (approximately $1.9 million) were received.

Tornado Cash is an automated service that lets users obfuscate the flow of cryptocurrency out of a wallet by combining funds from different users into one pool. This breaks the public, on-chain flow of cryptocurrency between wallets, making it more difficult to trace how ETH is being sent.

Privacy advocates say Tornado Cash lets them transact cryptocurrencies with less fear of surveillance, but authorities have described it and similar tools as a way to launder money. The service was banned in the United States following Treasury Department sanctions in 2022.

Given the use of Tornado Cash to funnel substantial amounts of ETH into funding wallets, this is actually wash trading or money laundering by buyers using NFT purchases to further complicate the flow of funds between crypto wallets and assets. There may be an attempt at laundering. On the other hand, use of Tornado Cache does not necessarily indicate illegal action or intent.

OpenSea did not immediately respond to a request for comment.

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Source: decrypt.co