An amount of 11,325 bitcoins was just moved on Tuesday afternoon (29). Equivalent to BRL 2.56 billion, such cryptocurrencies are linked to the possible hack of the Cryptsy exchange, which took place in 2014. At the time, Paul Vernon, founder and CEO of Cryptsy, reported that the loss was related to malware contained in the wallet of an altcoin, Lucky7Coin. However, the exchange continued to operate normally, covering the case with practical fractional reserves, until it closed down two years after the hack. Furthermore, on January 26 this year, Vernon was indicted in the US for fraud, destruction of evidence and tax evasion. Therefore, the movement of these more than 11 thousand bitcoins may be linked to his judgment.
11,325 bitcoins moved
At the time, the 11,325 bitcoins were moved from the Cryptsy exchange wallet to eleven different wallets, still in 2014. Ten of them contain 1,000 BTC and another a larger amount, 1,325 BTC. At the time, each unit of Bitcoin was being traded for 1,400 reais, so the amount was equivalent to about 16 million reais. Almost eight years later, these 11,325 BTC are worth R$2.56 billion.
Whale Alert announcements about moves. Without explanation, such cryptocurrencies have remained dormant during this great period. In total, the money stood still for 7 years and 8 months. In addition, these addresses also have 11,325 BCH, not yet moved, representing another R$ 20 million to this account. In addition to the amount in Bitcoin, Cryptsy is estimated to have lost another 300,000 Litecoin (LTC) on the same date. Today this amount is equivalent to R$ 186 million.
Founder in trouble in justice
The reason for the movement of this BRL 2.56 billion in Bitcoin seems very clear. Cryptsy founder Paul Vernon was indicted by US authorities for several frauds in January of this year.
“The charges include tax evasion, wire fraud, money laundering, computer fraud, tampering with records, documents and other objects, and destruction of records in a federal investigation.”
Going further, the text points out that Cryptsy continued operating normally even though it did not have the cash on hand. Later, in 2015, Vernon moved to China, publicly announced what had happened, and in 2016, after being notified of the exchange’s liquidation process, he hacked into his own exchange’s servers to destroy the exchange’s database.
Who is in control of the funds, hackers or police?
However, while the US confiscated funds from the Bitfinex hack last month, it is highly unlikely that the same thing happened again, despite the link to the above fact. The main reason is the dispersion of these 11,325 bitcoins into different fractions containing between 15 and 19 BTC for 784 different addresses. Apparently, it could be the beginning of an attempt to cover the tracks of these funds. However, although the data of these transactions are public, it is impossible to be sure who is behind the movement of these BRL 2.56 billion in Bitcoin, much less the purpose of these transactions.