A seven-figure sale of a CrypToadz NFT on Ethereum wasn’t that surprising during the market chaos of late 2021. But such a sale today, amid significantly weakened demand for NFT assets, will certainly stand out. And today’s $1.6 million purchase of a CrypToadz NFT is also raising some red flags, thanks to a connection to Tornado Cash.
CrypToadz #4030 was purchased today on the OpenSea marketplace for 1,055 Wrapped Ethereum (WETH), or worth more than $1.6 million. The buyer also paid OpenSea a fee of almost $42,000 worth of ETH on top of the base price.
The amount paid is dramatically higher than the going rate for a CrypToadz NFT. Currently they are start at 0.53 ETH (approximately $835) on OpenSea, with the top listed offering on that particular NFT coming in slightly higher at just under 0.6 ETH ($940). In other words: the buyer has paid Good above the market interest rate profile photo (PFP) project.
The purchase wallet was funded by a wallet that took money from Tornado Cashhttps://t.co/nNhKvSVhoz pic.twitter.com/aInHO8vNyG
— TexasHedge (@0xTexasHedge) October 9, 2023
Initially, Crypto Twitter commenters pointed it out a “fat finger” error–that the buyer may have rushed through the process too quickly and accidentally paid much more than intended. We have also seen clear examples of this on the other side, where salespeople accepted bids which were well below the market price for a particular collection.
However, a little more digging reveals another possible answer: washing trade.
See, the wallet that purchased the CrypToadz NFT today was recently funded with approximately 1,116 ETH (approximately $1.76 million) from another wallet – and that wallet received approximately 1,200 ETH (nearly $1.9 million) from the Ethereum coin mixing service Tornado money in September.
Tornado Cash is an automated service that allows users to obscure the flow of cryptocurrency to and from wallets by mixing funds from different users into a pool. That breaks the public, on-chain flow of cryptocurrency between wallets, making it harder to track how ETH is being moved around.
Privacy advocates say Tornado Cash allows them to trade cryptocurrency with less fear of surveillance, but authorities call it and similar tools a way to launder money. The service was subsequently banned in the United States Sanctions from the Ministry of Finance in 2022.
Given Tornado Cash’s use to funnel significant amounts of ETH into the funding wallet, this may indeed be an attempt at wash trading or buyer money laundering, using an NFT purchase to increase the flow of funds between crypto wallets and further complicate assets. On the other hand, using Tornado Cash does not necessarily imply illegal actions or intentions.
OpenSea did not immediately respond to a request for comment.