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In the NFT market, we often witness jaw-dropping sales with their prices. However, sometimes these sales can be due to user error or part of a serious money laundering operation. An incident that occurred last night on OpenSea once again revealed this aspect of the NFT market.
$1.6 Million Worth NFT
In the NFT collection, a user bid 1,055 Wrapped Ethereum (wETH) worth $1.6 million for a rare item in the CrypToadz NFT collection. The base price in the collection is slightly below $1,000, which raised questions for many users. The bid was accepted, and the transaction was completed. The collection, launched by the artist Gremplin in 2021 during the NFT frenzy, consists of 6,969 pieces. The NFT collection, which reached a volume of 12,000 Ethereum (38 million dollars) in just the first 10 days, still maintains its popularity.
Following these developments, many Web3 users started to follow this mysterious address. Initially, the fact that the transaction took place through an anonymous account drew attention. Why would a piece that was purchased just two weeks ago for 0.95 ETH ($1,600) be sought after for $1.6 million?
Wash Trading Tactic
After research, a user discovered that this wallet had previously conducted transactions through Tornado Cash, a service known for money laundering. Although such peculiar purchase transactions are sometimes attributed to human error, this situation might actually be a wash trading tactic, which is a suspicious funds laundering technique.
Tornado Cash is generally seen as a platform used for laundering suspicious funds and is not well-received in the Web3 world. In August 2023, the U.S. Office of Foreign Assets Control announced sanctions against the platform due to allegations of its involvement in money laundering.
An example of this situation can be seen in the AnubisDAO rug-pull incident that occurred in July 2021. Just 20 hours after its launch, the team disappeared with $60 million worth of Ethereum, and the funds were transferred using Tornado Cash. The 13,556 ETH seized in the attack was laundered through 100 different transactions.
