A tranche of long-dormant Bitcoin seized in the 2016 hack of the Bitfinex cryptocurrency exchange are on the move today, an over $620 million sum that has some market participants spooked and may be contributing to a downward slide for Bitcoin. 

Blockchain analytics bot Whale Alerts was the first to raise the alarm, calling attention to a series of over five dozen transactions from wallets that have largely been inactive since the 2016 hack:

The largest transaction was for 1,241.3672 BTC, worth well over $78 million (for which the hacker paid a 0.00072910 BTC fee, or roughly $45), though other transactions were for as little as 1.5 BTC. Cointelegraph counted 63 transactions in all, moving just over 10,050 BTC worth over $620 million. 

While the hacker has a spotty history of intermittently moving their coins between wallets, the transfers today comfortably account for the largest transactions of hacked Bitcoin since the attack itself. Throughout the years the hacker has moved between 1 and 2% of their coins, and today they moved 8.3% of their nearly 120,000 BTC worth over $7.4 billion.

The purpose of the transactions are difficult to augur. Some of the transfers were between wallets known to be associated with the hacker, though many were to newly-created wallets. Multiple observers have pointed out that it’s near-impossible for the hacker to sell their BTC, as no major exchanges will accept the tainted coins. The hacker tried to sell some 736 BTC in 2020 via a Russian darknet market, with some ironically ending up back on Bitfinex.

The hacker’s inability to sell their coins prompted some Twitter traders to speculate that the point of the transfers is simply to spook the market, possibly in tandem with a short position:

The hunt for the hacker is still ongoing, as in August last year Bitfinex offered up to $400 million as a reward for information on the attacker. The case seemed to have a breakthrough in 2019, when two Israeli brothers were accused of involvement in the attack, but police recovered wallets containing far less than the nearly 120,000 BTC lost in the hack. 

The Bitfinex whale breaching adds to an already tumultuous day for markets. After a surge to over $425 per share, Coinbase is struggling to find a price floor at $350/share. While still well above the reference price of $250 per share, traders have nonetheless interpreted the trading as a negative signal as Bitcoin has dropped to $61,000.