Ethereum Price Drops Below $2500 as $2B ETH Moves from Seized Wallets
Today, hundreds of Ethereum (ETH) wallets, dormant for over three years, have recently become active, moving large sums of ETH. This Ether stash was seized by Chinese police in 2021. Moreover, this movement suggests a massive ETH and other crypto dump might be on the horizon soon. Post this transfer, ETH price succumbed to bearish pressure falling below the $2500 support.
Blockchain analytics firm Lookonchain noted that these wallets have transferred a staggering 789,533 ETH, valued at approximately $2 billion. On-chain tracking revealed that the funds originated from a wallet associated with the notorious Plus Token ponzi scheme, dubbed “Plus Token Ponzi 2.”
This wallet had distributed the vast sum of ETH to numerous addresses in 2020, remaining inactive since April 2021, according to EtherScan data. The sudden activity was detected about four hours ago, with the wallets commencing the transfer of ETH. However, these transfers also led to speculations of scammers tampering with the Ether reserve held with Chinese police.
Currently, since there is no confirmation, it is believed that the Chinese government has initiated action towards the seized crypto assets. The Plus Token scam was one of the largest crypto Ponzi schemes in history. It saw the Chinese authorities seize an immense amount of digital assets during their crackdown.
The confiscated cryptocurrencies included 194,775 Bitcoin (BTC) valued at $11.2 billion, 833,083 Ethereum (ETH) worth $2.11 billion. The root cause of these moves started back in 2018 where the operation advertised a crypto arbitrage trading platform that did not exist.
The aftermath of the pyramid scheme consequently led to a luring of over 2.6 million users and the conviction of over 15 people in a 2-year to 11-year sentence. In addition to the large amounts of Bitcoin and Ether seized, the authorities also confiscated significant amounts of other cryptocurrencies. Here is the detailed list:
- XRP: 487 million XRP ($252 million)
- Bitcoin Cash (BCH): 79,581 BCH ($25.8 million)
- Litecoin (LTC): 1.4 million LTC ($82.3 million)
- EOS: 27.6 million EOS ($12.7 million)
- DASH: 74,167 DASH ($1.7 million)
- Dogecoin (DOGE): 6 billion DOGE ($609 million)
- Tether (USDT): 213,724 USDT
The reallocation of these funds comes at a time when the crypto market is experiencing increased volatility amid geopolitical tensions and recession concerns. Large transfers can influence market prices, potentially causing significant fluctuations. Hence, the actions of the Chinese authorities in handling these assets are being closely monitored by the crypto community.
The next steps by the Chinese authorities regarding the remaining seized assets, including Bitcoin and XRP, remain uncertain. As of writing, Ethereum lost hold on the $2,500 level. The ETH price fell to $2,400 on Wednesday, August 7, a 4% decline from the 24-hour high of $2,551.56. Moreover, Jump Trading’s $30 million ETH selloff also added to the pressure.
During the decline, ETH’s market capitalization and 24-hour trading volume had dipped by 4.80% and 22.85% respectively to $288.42 billion and $23.41 billion.
