A recent sale of $9.4 billion in Bitcoin by Galaxy Digital has raised concerns in the crypto community due to potential ties to stolen assets.
Overview of the Sale
Galaxy Digital announced this week that it executed an over-the-counter transaction involving 80,000 Bitcoins. The seller was described as a long-term investor who previously acquired Bitcoin as part of an estate management strategy.
Scandal Surrounding Bitcoin Origins
According to CryptoQuant CEO Ki Young Ju, the coins were sent from wallets inactive since 2011. These wallets were also linked to the defunct MyBitcoin exchange, which ceased operations after a reported hack. MyBitcoin was one of the earliest cryptocurrency exchanges and has been offline since mid-2011 after its operator Tom Williams announced a hack. At the time, the exchange reported losses of approximately $72,000, which could now be valued in the billions.
Security and Transparency Concerns
Concerns are rising that Galaxy may have skipped essential due diligence checks before processing the high-value transaction. Ki Young Ju noted that there is no clear indication that Galaxy verified the source of the coins before executing the deal. Amidst this situation, market participants are questioning how easily questionable assets can be reintroduced into the system without adequate oversight.
The trading of $9 billion in Bitcoins linked to historical hacks highlights ongoing security and transparency issues in the cryptocurrency market. Galaxy Digital is facing criticism regarding the verification of asset legitimacy.
