Blockchain analytics bot Whale Alert was the first to sound the alarm, highlighting a series of more than five dozen transactions from wallets that had been largely inactive since the 2016 hack:
1,241.37 #BTC ($78,246,494 USD) funds stolen in the 2016 Bitfinex hack transferred to an unknown wallethttp://t.co/yLsJDXUBvE.
– Whale Alert (@whale_alert) April 14, 2021
The largest transaction was for 1,241,3672 BTC worth more than $78 million (for which the hacker paid 0.00072910 BTC, or about $45), but other transactions were for just 1.5 BTC. Cointelegraph counts 63 transactions that moved just over 10,050 BTC worth over $620 million.
Although the hacker has regularly moved coins between wallets in the past, today’s transfers conveniently represent the largest hacked bitcoin transactions since the attack itself. Over the years, the hacker has moved between 1 and 2 percent of the coins, and today he has moved 8.3 percent of nearly 120,000 BTC worth more than $7.4 billion.
2016 Bitfinex hack summary from June 2020. Source: Crystal.
The purpose of the exchanges is difficult to predict. Some of these transfers occurred between portfolios known to be connected to the hacker, but many were connected to newly created portfolios. Many observers have noted that it is nearly impossible for a pirate to sell their BTC, as no major exchange accepts modified coins. The hacker attempted to sell about 736 BTC through the Russian darknet market in 2020, some of which ironically returned to Bitfinex.
The hacker’s inability to sell his coins has led some traders on Twitter to speculate that the purpose of the transfers is simply to scare the market, perhaps in conjunction with a short position :
No, a Bitfinex hacker cannot sell #Bitcoin (not in any volume).
But he/she can move it to try to manipulate the market while shorting it elsewhere …..
– Alistair Milne (@alistairmilne) April 14, 2021
The hunt for the hacker continues after Bitfinex offered up to $400 million in rewards for information about the attacker last August. The case seemed to have a breakthrough in 2019 when two Israeli brothers were charged with involvement in the attack, but police found wallets containing far less than the nearly 120,000 BTC lost in the hack.
The Bitfinex whale adds something to an already tumultuous day for the markets. After jumping above $425 per share, Coinbase is struggling to reach the $350 per share mark. Although this price is still well above the benchmark price of $250 per share, traders still interpreted this trade as a negative signal, with bitcoin falling to $61,000.
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