. 3 min read

‘Crazy’ Chain of Bitcoin Transfers Drives Cryptoverse Crazy

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Millions in the world’s most popular cryptocurrency have been moved from one wallet to the next today, and the Cryptoworld wants to know why.

A screenshot of the popular conspiracy GIF.

In the last 24 hours quite a few large Bitcoin (BTC) transactions have been spotted by the crypto tracking Twitter account Whale Alert. First we find two transactions from exchanges to unknown wallets: BTC 1,000 (worth USD 7.4 million) moved from bitFlyer and BTC 1,500 (USD 11 million) from OKEx, plus a BTC 1,000 transfer from Binance to Gemini.

However, following that, there is a series of large transfers from unknown wallets to unknown wallets recorded. Twenty two related similar transaction have been recorded, one after another, ranging between the first and the largest one of BTC 55,877 (c. USD 415.4 million) and the last, smallest one of BTC 55,337 (c. USD 410.3 million).

But looking deeper, we see it started with this address that has 9 transactions recorded, all made in the last two days. All its BTC 55,877 were sent to this address, with only two transactions, both made today. This address, also with only two transactions, then received BTC 55,860 from multiple addresses, one of which is the previously mentioned address, which in turn sent it to the next one, and so on, forming a chain to the last address reported. It too currently has two transactions, but both are transfers to the wallet with 0 BTC sent. It got BTC 55,337 from the previous wallet in line, and two hours later a small amount of BTC 0.00004444.

Observing the transactions, this is what can be concluded:

  • a total of 23 addresses were used in the chain;
  • BTC was never transferred to an address used previously;
  • all but the first one made only two transactions each, on December 6;
  • all received BTC was transferred to the next address, with nothing left on the balance;
  • BTC stayed no longer than a minute on each addresses;
  • the final transfer was sent 12 minutes after the first one.

Why would someone do this?

This is what the Cryptoverse is asking, as it’s not quite clear what would anybody gain by transferring their money from one address to the next, twenty-two times, incurring fees each time.

Whale Alert announced that it will show less of these transactions as they “are very likely change transactions,” which might explain the transactions being sent in their entirety to a newly generated Bitcoin address.

This decision was not welcomed by the community as many felt it’s something they should continue reporting on. Others expressed their hope that change transactions were behind this so to “put to bed the Bittrex Exchange wallet transfer conspiracy.”

Larry Cermak, head analyst for news site The Block, suggested that this could be “peeling,” whereby a small amount from a large transaction is transferred to an output address and the remainder to another, repeating this numerous times, and all in the effort to increase privacy, which is why it can be used for money laundering. However, given how easily this is noticeable by analysis software, Cermak doubts this is a matter of something illegal.

He does say that this address looks like it’s affiliated with Bittrex, or it could be their new wallet system. People have noted, however, that it’s unlikely that even blockchain analysis softwares would be able to track these coins past them being mixed using a mixer such as CoinJoin.

Developer Udi Wertheimer joined in on the discussion saying: “I’m not sure how this is “mixing user funds” in any way that is more significant than normal exchange operation. Could be any number of reasons that an exchange would want to have pre-prepared 15 BTC sized outputs.” He added that “mixing” is subjective and that during normal operation coins in exchanges are “mixed” anyway. “You deposit funds, when you withdraw you don’t get coins from those outputs, you get them from other outputs. There’s no need for any specific base layer activity for that,” says Wertheimer.

Other theories were put on the table as well. Some say that it could be an exchange, or “someone trying to troll with on-chain volume / metrics,” others asked if it could be beta testing of some sort, and there were those who were worried about the amount of BTC moved and their potential effect on the market.

And, as this is the Cryptoverse we’re talking about, there were some more humorous theories thrown out there for our amusement as well.




Meanwhile, BTC is now trading at USD 7,378. It dropped 0.25% in the last 24 hours and 2.59% in the last week.