The Mysterious $1 Billion Bitcoin Wallet

5 September, 2018

Last week, a user on Reddit noticed that a large amount of bitcoin is on the move. Transactions are being split up in a reported attempt to mask the activity, however, the transactions all trace back to a wallet address that has previously been linked to both Silk Road and Mt. Gox. Whose wallet is it really?

Silk Road Involvement Remains Unclear

The identified transactions related to this particular Bitcoin address tells part of the story. There is a very real chance this wallet is linked to Silk Road’s infamous operator Dread Pirate Roberts. The person allegedly behind this pseudonym is Ross Ulbricht, who was arrested years ago.  With Ulbricht in jail, however, there is no one to officially take control of the funds stuck in this wallet. This raises a lot of questions as to whether or not this money even belongs to the infamous darknet marketplace

Another theory floating about on the internet links this wallet address to Mt. Gox. The defunct cryptocurrency exchange fled with users’ holdings several years ago. Some of the stolen funds have been successfully recovered over the years.

There appears to be a lot more merit to this story than first meets the eye. An ongoing “investigation” by Reddit user sick_silk highlights some intriguing aspects. Unlike previous Silk Road transactions, the funds on the move are effectively being split into very small batches, which hints at the involvement of a cryptocurrency mixer.

Assuming Mt. Gox is involved in this activity, the purpose remains a bit unclear. Earlier this year, it became apparent the exchange needs to reimburse creditors. The total sum to be repaid equals $1bn, which is on par with the value of BTC being moved around all of a sudden. The original wallet is now completely empty, as all funds have been transferred to different addresses. It would appear some of the money is already being deposited to various exchanges, including Binance.

Major Bitcoin Dump Imminent?

As the funds are being moved to various exchanges, a sell-off seems almost inevitable. Selling $1bn worth fo BTC through small orders will undoubtedly cause the price to retrace significantly. Another possibility is that the funds are being diversified through specific altcoins. What purpose that serves exactly, is anybody’s guess as of right now. Converting to fiat currency appears rather unlikely, based on the exchanges currently involved.  As some altcoins are noting strong increases in value right now, the conversion process may already be ongoing.

The cryptocurrency community remains a bit divided on what this all means. Fears of a market dump can trigger a wave of panic selling across all markets. So far, it looks like the movement of the funds is not triggering any negative market reaction at all, so perhaps the “doomsday scenario” won’t come to pass, after all.

Situations like these are always intriguing to keep an eye on. Any wrongdoings involving cryptocurrency can be identified almost immediately without special software. The transparentnature of Bitcoin makes it very easy to keep tabs on addresses and transactions. Whether it is Silk Road, Mt. Gox, or an entirely different source of funds, the community will be quick to raise the alarm if something nefarious happens.

Source link   Crypto currency: Bitcoin

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