Silk Road, Mt.Gox, mystery whale: who’s behind the $1 billion bitcoin wallet?

KarpelèsMark Karpelès, founder of bankrupted exchange Mt.Gox

One billion dollars worth of bitcoin is on the move and that’s got the crypto sleuths working overtime: is it connected to Mt.Gox or Silk Road?

The address (1933phfhK3ZgFQNLGSDXvqCn32k2buXY8a ) the funds moved from may be related to the Silk Road – the dark web marketplace that was taken down by the FBI in October 2013. The last time there was a transaction associated with the wallet was four years ago.

However, sick_silk, the handle of a person on discussion form website Reddit who has taken it upon themselves to investigate the movements, says it doesn’t explain why the transactions are being disguised by mixing them up with other. According to sick_silk “the methodology of transfer does not match in my opinion, it looks that the owner tries to hide the movements by mixing the coins”.

Mt.Gox to dump, again?

The other possibility, which is more likely, is it may be a wallet address from the closed Mt.Gox. The Japan-based exchange lost 850,000 bitcoins (200,000 were later “found” by exchange founder Mark Karpelès ) in 2014.

A Tokyo district court ruled in June that the funds must be returned to creditors. The sum concerned is valued at $1 billion – the same amount being moved from the wallet.

 

 

Dividing the bitcoins into parcels of 100, the wallet containing 111,114.62 BTC has been drained in a period of three days. Now the funds are being moved onto exchanges.

Here are the two addresses (BTC and Bitcoin Cash):

#Bitcoin: https://www.blocktrail.com/BTC/address/1KyJr2L6CN5XhDfv9Sb5q3kjKwFCrRxTLy/transactions

#BitcoinCash: https://www.blocktrail.com/BCC/address/1KyJr2L6CN5XhDfv9Sb5q3kjKwFCrRxTLy/transactions

The obvious conclusion is that those acting for Mt.Gox creditors are responsible, given the similarity in the sum involved.

Further investigation by our sleuth has found that coins are being moved onto to Binance and Bitfinex, neither of which provide a fiat exit route.

 

Check out the reddit post here.

Most of the transfers to Binance have happened in the past 10 days.  The Binance wallet concerned is here: 1NDyJtNTjmwk5xPNhjgAMu4HDHigtobu1s.

Moving the BTC to an exchange may be for the purpose of diversifying the holdings by buying some alts. With Bitcoin dominance at 53% perhaps it is a good time to pick up some bombed out alts.

Tx graph of the Binance recieving wallet 1NDyJtNTjmwk5xPNhjgAMu4HDHigtobu1s.

Tx graph of the Binance recieving wallet 1NDyJtNTjmwk5xPNhjgAMu4HDHigtobu1s. Key: red transactions <1 day, yellow <1 month, blue <1 year, green

What does all this mean? Well, it could mean the price of bitcoin could fall as BTC is sold for an altcoin(s) and the price of select alts could spike.

The other option is that the wallet belongs to a whale and not the Mt.Gox custodian, “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 “, says  sick_silk.

The wallet owner probably won’t be buying ETH, given the local difficulties of the network, reported here.

 

About the Author

Pete Winston
I live and breathe crypto and have a small holding (BTC, ETH, EOS and XLM) that isn’t life-changing, so move along hackers! You can email me here: petewinston@coinintelnews.com

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