When wallet accounts holding large sums of cryptocurrency start getting active out of the blue, crypto markets should brace themselves for impact. Recently, a meteor shower of 111,114 Bitcoins from a dormant wallet was witnessed. And as the price of Bitcoin has remained consistent at over $7,000, could the wallet owner be a benefactor crypto whale on a mission to boost BTC prices or a shark looking to dump his coins in the market? One Reddit user decided to investigate.
How Did the Story Begin?
A large Bitcoin wallet said to be connected to the Silk Road reportedly started moving coins from its accounts in the last week of August 2018. The activity was monitored by a Reddit user who goes by the name of @sick_silk. On Aug. 31, said user posted on Reddit saying that the wallet had been moving funds actively for three days and dividing the holdings into chunks of 100 coins by sub wallets. The original wallet contained 111,114.62 Bitcoins and Bitcoin Cash. This could be worth at least $844 million now, even excluding all Bitcoin forks other than BCH (which when accounted for could drive the value up to $1 billion).
The last sub wallets movements on the account occurred four years and five months ago, that is, March 9, 2014. However, beginning the last week of August this year, the wallet owner divided his share of coins into chunks of 60,000 at first, then 30,000, 20,000, 10,000, 5,000. He then made sub wallets of 500 coins and now 100 coins. The wallet made some negligible transactions in 2017 and 2018 and stayed active, but not at the scale seen last week.
According to the Reddit post, the wallet in question seems to be linked to one DPR of Silk Road, a black market on the dark web where illegal items are sold like drugs or weapons. However, according to sick_silk, after running a few checks, he found out that this is not one of the seized wallets, saying further:
“Either the FBI has not sold them yet (last auction was in November 2015) or someone else (linked or not to SilkRoad) has access to it.”
So if it is not a Silk Road related wallet, the Reddit user claims that it could either be:
(1) “a MtGox cold wallet that has been seized or is still owned by MtGox: in fact the wallet funds moved in March 2014 right after MtGox filed for bankruptcy one month earlier in February 2014; these movements dates are really similar to the 200,000 lost coins ‘found’ by Karpeles which moved March 7th, 2014”; or
(2) “a whale wallet since the major part of the 111,111 coins are coming from a very old deposit of 37,421 coins processed on June 21st, 2011 making this an early adopter’s wallet.”
Binance and Bitfinex Receive Funds
The coins stored in the 111,114 wallet have been moved to Binance and Bitfinex, two of the largest cryptocurrency exchanges in the world. User sick_silk suggests that about 14 percent or roughly 15,593 BTC that originated from this wallet is worth over $110 million. Bitfinex received the majority of these coins, amounting to 11,114, between Aug. 24 and Sept. 2. On the other hand, 4,421 BTC were transferred to Binance. Bitmex also received a few hundred of the coins.