In a recent development, CryptoQuant CEO Ki Young Ju announced that 80,000 Bitcoin (BTC), which had remained dormant since 2011, were likely to have been sold via Galaxy Digital a few days ago.
The coins, Ju explains, originated from wallets that were previously associated with the now-defunct MyBitcoin platform, which was a custodial provider of Bitcoin wallets that collapsed following a hack in August 2011.
Such a vast quantity of Bitcoin, worth well over $9.5 billion using current prices, has attracted the attention of the cryptocurrency community because of its mystery and potentially criminal background.
MyBitcoin: A 2011 Hack Still Casting Shadows
The MyBitcoin website disappeared overnight in July 2011, following a reported critical security breach.
In an August 2011 blog entry, a cryptographically signed “incident report” by the site operator, Tom Williams, an unknown individual reported that a hacker gained access to their Shopping Cart Interface (SCI) system.
As stated in the 2011 press release, the hack was reported to have cost close to $250,000 in BTC at the time.
The site was immediately pulled offline to prevent further loss, but users were left in the dark for days without a contact method to the operators.
Subsequently, Williams stated that MyBitcoin would enter receivership and initiate a claims procedure to refund money to impacted customers, though most have conjectured that the hack was a fake exit scam.
Ki Young Ju: Funds Could be Hacker or Tom Williams
According to Ki Young Ju, the blockchain records indicate that the 80,000 BTC recently moved originated from the same set of addresses that were inactive since April 2011, just before the MyBitcoin hack.
Ju speculates that the recent movement most likely originates from the original hacker himself or Tom Williams, who remains anonymous and unrecoverable even today.
While Galaxy Digital is believed to have bought the coins through an over-the-counter (OTC) transaction, Ju wondered if the company had fully executed forensic validation of the source of said funds.
That potentially stolen or disputed BTC was laundered through a solid institutional platform adds a sense of scandal to the deal.
Galaxy Digital’s Role in Facilitating Historic Whale Transactions
Galaxy Digital, one of the major institutional players in the cryptocurrency investment space, has been involved in several high-value purchases of long-dormant BTC during July alone.
Prior to the sale of the first 40,000 BTC, another wallet belonging to the same person with 40,000 BTC, which had been dormant for 14 years, sold out its entire inventory via Galaxy for a valuation of approximately $4.7 billion.
Cumulatively, these sales comprised over 80,000 BTC at an average price of $118,834 per coin, representing the largest exit by a long-time whale in Bitcoin’s history.
Institutions prefer to make OTC trades so as not to influence market prices, but these publicity-grabbing sales signal that even early adopters and major holders are preparing for more market volatility, or simply cashing out after a decade of holding on.
Also Read: Dormant Bitcoin Whale Dumps $57.6M BTC Via Binance After 1-Year, $34M Profit At Stake