(Bloomberg) --

A white-haired, green-eyed pixelated character known as a CryptoPunk 9998 just sold for more than half a billion U.S. dollars -- or so it appeared -- the latest wild development in the booming non-fungible token space. But the Ethereum blockchain shows the money from the NFT trade ended up right back where it started, raising the question of why anyone bothered.

The process started Thursday at 6:13 p.m. New York time, when someone using an Ethereum address beginning with 0xef76 transferred the CryptoPunk to the address starting with 0x8e39.

About an hour and a half later, 0x8e39 sold the NFT to an address starting with 0x9b5a for 124,457 Ether -- equal to $532 million -- all of it borrowed from three sources, primarily Compound.

To pay for the trade, the buyer shipped the Ether tokens to the CryptoPunk’s smart contract, which transferred them to the seller -- normal stuff, a buyer settling up with a seller. But the seller then sent the 124,457 Ether back to the buyer, who repaid the loans.

And then the last step: the avatar was given back to the original address, 0xef76, and offered up for sale again for 250,000 Ether, or more than $1 billion.

Larva Labs, which created the CryptoPunks, said on Twitter that “someone bought this punk from themself with borrowed money and repaid the loan in the same transaction.” While the bid is technically briefly valid it can never be accepted, the tweets said, adding that Larva would add filtering to avoid generating notifications for that kind of transaction in future.

In conventional, regulated securities markets, this situation would be called wash trading, which is banned on grounds that trading with yourself can be used to artificially inflate prices and suggest more demand than really exists.

Tyler Gellasch, who helped write the U.S. financial regulatory overhaul known as Dodd-Frank, tweeted that the U.S. Treasury and Justice Department might want to take a look, since a price of more than $500 million “seems just a bit high.”

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