Unconventional Use of Cryptocurrency Funds: A Case Study
ZachXBT, a renowned cryptocurrency detective, has shared an analysis of a unique and unconventional use of significant cryptocurrency funds. According to his investigation, an unidentified individual withdrew over 11,200 ETH, valued at around $25 million, from Tornado Cash, a cryptocurrency tumbler known for its privacy features. This large sum of money was primarily used to purchase Magic The Gathering (MTG) trading cards, a popular collectible and competitive card game.
ZachXBT meticulously traced the flow of these funds, revealing a complex process involving multiple steps. The individual involved first withdrew the ETH in batches of 100 from Tornado Cash to a total of 11 different addresses. Following this, the ETH was converted to Wrapped Ethereum (WETH), which was then transferred to new addresses. The WETH was subsequently unwrapped back into ETH and converted into USDC, a stablecoin pegged to the US dollar. This USDC was then used to facilitate transactions with an MTG broker.
The identification of the MTG broker was a critical part of ZachXBT’s investigation. He discovered the broker’s involvement through cross-referencing usernames on Instagram and OpenSea, a popular platform for trading digital collectibles. Further inquiries into the broker’s on-chain interactions with MTG sellers provided additional clarity. Interestingly, the buyer’s behavior in these transactions was notable for several reasons. The individual appeared to be overpaying for the MTG items by about 5-10%, and the payments were made upfront in cryptocurrency. Despite these large transactions, the buyer’s identity remained unknown to the sellers.
The investigation also revealed that the funds were distributed to various deposit addresses associated with major cryptocurrency exchanges like Kraken, Bitpay, and Coinbase. This aspect of the investigation suggests a broader network of financial activities and raises questions about the origin and ultimate destination of these substantial funds.
ZachXBT’s analysis does not conclusively establish the source of the funds. However, he considers the possibility that they could have originated from top Tornado Cash depositors such as Anubis, Cashio, and Uranium. This speculation is based on the timing and magnitude of their activities in relation to the withdrawal and spending patterns observed.
This case stands out for its unusual combination of large-scale cryptocurrency transactions and the world of collectible trading cards. The considerable amount spent on MTG cards, along with the sophisticated methods used to mask the money trail, highlights the diverse and sometimes unexpected ways in which cryptocurrency can be utilized. It also underscores the ongoing challenges in tracking and understanding the flow of digital currencies, especially in cases where privacy tools like Tornado Cash are used. The case continues to garner interest as it sheds light on the complex and often opaque nature of cryptocurrency transactions.
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