Ethereum Update: Inactive ETH Wallets Connected to $4 Billion Scam Reactivate
August 8, 2024
Reports surfaced on Wednesday indicating that numerous Ethereum wallets that had been inactive for over three years were suddenly moving substantial amounts of ETH, sparking concerns among investors. These wallets were suspected to be linked to a $4 billion crypto scam, leading to fears of a significant market impact from a potential dump.
The tracking firm Lookonchain identified hundreds of Ethereum wallets that had been dormant for 3.3 years, which began transferring significant amounts of ETH. Initially, it was suggested that these wallets might have moved over 700,000 ETH, with the funds traced back to an address associated with the PlusToken Ponzi Scheme. Notably, Chinese authorities had seized 833,083 ETH in 2020, now valued at approximately $2.11 billion, as part of the crackdown on the fraudulent crypto trading platform.
The ETH from these reactivated wallets originated from an address labeled “Plus Token Ponzi 2,” which distributed 789,533 ETH from the confiscated assets to numerous addresses and had remained inactive since April 2021. This development triggered discussions among crypto investors, who expressed concerns about potential selling pressure on Ethereum and the broader market, akin to actions taken by German and US regulatory authorities.
However, subsequent revelations clarified that the initial estimates of the ETH being moved were inaccurate, prompting Lookonchain to retract its original report. On-chain data analyst EmberCN highlighted that the volume of Ether available for sale was much smaller than previously thought. Most of the 789,534 ETH had been sent to the Bidesk exchange three years ago, subsequently transferred to Huobi and sold in 2021.
EmberCN also identified around 12 Ethereum addresses that had received PlusToken-related ETH in the last 30 hours, collectively holding 25,757 ETH, valued at approximately $63.1 million. Notably, some of these funds had not been transferred to Bidesk in 2021 and were withdrawn from the exchange without being sent to Huobi.
Despite the reassurance that the current movement of funds represented only a small unsold portion of the PlusToken-related tokens, Ethereum experienced a 6.5% decline in value over the last four hours, attributed to a sell-off by Jump Trading. The Chicago-based trading firm reportedly sold $29 million worth of ETH, with an additional $48.2 million prepared for sale. Jump Trading still retains 21,394 wstETH, valued at around $63.6 million.
At the time of reporting, ETH’s price had dropped from the $2,500-$2,540 range to approximately $2,370, marking a 6.8% and 28.3% decrease in daily and weekly trading, respectively. This downward trend was further exacerbated by Jump Trading’s significant sell-off activity, impacting the cryptocurrency’s market performance.
