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08/08/24
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Revived Dormant Ethereum Wallets Spark Market Concerns: Clarifying the $2 Billion Scam Speculation
Recent reports have emerged indicating that numerous dormant Ethereum wallets, some inactive for over three years, have become active again, moving substantial quantities of ETH. Initially, it was speculated that these wallets transferred a total of $2 billion in ETH, potentially related to a $4 billion cryptocurrency scam. Investor concerns about a possible market downturn were prevalent, but subsequent information suggested that the scale of these transfers was significantly overstated.
On-chain analytics firm Lookonchain noted that a considerable number of Ethereum wallets began moving ETH today. In an earlier statement, which has since been retracted, the firm estimated that over 700,000 ETH—approximately valued at $2.11 billion—was involved. These funds were traced back to the PlusToken Ponzi Scheme, a fraudulent crypto platform that Chinese authorities targeted in 2020, resulting in the seizure of a large quantity of ETH.
These transactions, primarily traced to a wallet associated with the PlusToken scheme, recorded its last activity in April 2021. As the news broke, speculation surged among crypto investors regarding potential market impacts similar to those experienced in other nations. However, later analyses revealed that the anticipated volume of ETH movement was much less than initially reported, prompting the retraction of the earlier statement.
Further investigation indicated that out of the seized ETH, much had previously been moved to the defunct exchange Bidesk between June and September 2021. The ETH was subsequently sold on another exchange, contributing to worries surrounding the market. A recent analysis identified that approximately 12 Ethereum addresses were involved in accumulating PlusToken-related ETH, collectively holding close to 25,757 ETH, a fraction of what was initially thought.
Despite the re-evaluation of the situation, Ethereum’s market price suffered a decline, dropping to around $2,370, marking significant decreases both daily and weekly. Contributing to this downward trend was Jump Trading, a trading firm that recently liquidated an additional $29 million in ETH.
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