8 August 2024
On Wednesday, online reports unveiled that hundreds of Ethereum wallets that had been dormant for over 3 years were moving large amounts of ETH. The wallets were believed to have moved $2 billion worth of ETH linked to a $4 billion crypto scam.
Investors worried that another massive dump would affect the market’s recovery. However, further details revealed that the initial ETH amount suspected to be moving was considerably smaller.
3-Year-Old Dormant Ethereum Wallets Awaken
On-chain tracking firm Lookonchain reported that hundreds of Ethereum wallets started to move considerable amounts of ETH earlier today. In a now-deleted post, the firm suggested that the wallets, which had been dormant for 3.3 years, possibly moved over 700,000 ETH.
Lookonchain tracked the funds back to an address linked to the PlusToken Ponzi Scheme. In 2020, the Chinese police reported seizing 833,083 ETH, now worth around $2.11 billion, as part of the crackdown on the scam crypto trading platform.
The now-awaken ETH wallets’ funds came from an address labeled “Plus Token Ponzi 2.” This wallet dispersed 789,533 ETH from the seized assets to thousands of addresses and had not moved since April 2021.
The news sparked a conversation between crypto investors, who feared the Chinese government would follow the steps of the German and US governments, adding another wave of selling pressure to Ethereum and the recovering market.
However, newly unveiled details clarified that the amount of ETH suspected to be moved was incorrect, which prompted the on-chain data firm to delete its original report.
Is ETH’s Selling Pressure Over?
According to on-chain data analyst EmberCN, the amount of Ether “waiting to be sold” is significantly smaller. The analyst detailed that most of the original 789,534 ETH went into crypto exchange Bidesk three years ago. The tokens were transferred to the now-collapsed exchange between June and September 2021 via multiple Ethereum addresses.
Per the report, most of the ETH transferred to Bidesk was transferred into Huobi and sold in 2021. Additionally, the analyst claimed to have tracked down around 12 Ethereum addresses to have collected PlusToken-related ETH in the last 30 hours.
These wallets reportedly have 25,757 ETH, worth around $63.1 million. Some of that amount was not “transferred to Bidesk in 2021; some was taken out of Bidesk and not transferred to Huobi.”
EmberCN concluded the “current collection” moving was only a small unsold portion of the PlusToken-related tokens. However, the second-largest cryptocurrency by market capitalization still took a 6.5% hit in the last four hours. This performance could be attributed to Jump Trading’s latest sell-off.
Lookonchain revealed that the Chicago-based trading firm sold another $29 million worth of ETH today. Jump Trading also redeemed another $48.2 million in preparation for selling on Wednesday morning. Per the report, the firm still holds 21,394 wstETH, worth around $63.6 million.
As of this writing, ETH went from hovering between the $2,500-$2,540 range to trading around the $2,370 mark. This represents a 6.8% and 28.3% drop in the daily and weekly timeframes.