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Mystery Bitcoin Buyer Closes in on $1 Billion — ETF Institution or Retail Whale?

Last Updated January 17, 2024 5:20 PM
Josh Adams
Last Updated January 17, 2024 5:20 PM
Key Takeaways
  • Significant movements on BTC on January 17 failed to move Bitcoin’s price.
  • It turns out, a wallet holding nearly $1bn of crypto belonged to Crypto.com
  • Crypto.com identified the wallet for its reserves back in November 2022.

A series of large cryptocurrency transactions totaling close to $1 billion were recently spotted going into a single wallet by attentive blockchain analysts. The massive movement of funds in just one day has sparked curiosity among cryptocurrency followers about who owns the wallet.

A Billion Dollar Crypto Wallet

In a series of 27 transactions in one day, a single wallet managed to accumulate $937,936,352 worth of Bitcoin (BTC), or 22,073 BTC at the time of writing (January 17 2024). However, observers pointed out that BTC did not experience a significant shift in price—a giveaway for large purchases of the cryptocurrency.

However, it didn’t take long for the mystery to become clear. A Tweet by Crypto.com CEO Kris Marszelek said the wallet belonged to the exchange.  In fact, the Maszalek had previously identified  the address as a Crypto.com cold storage wallet in November 2022.

In November 2022, Marszalek said: “While the Proof of Reserves audit preparation is underway, we are sharing our cold wallet addresses for some of the top assets on our platform.

“This represents only a portion of our reserves: about 53,024 BTC, 391,564 ETH, and combined with other assets for a total of ~US$ 3.0b.”

Unlike hot wallets, which are online, cold storage keeps cryptocurrencies offline. This makes them, at least in theory, far more secure. Exchanges often balance the lesser accessibility of cold wallets with their extra security, a trade-off deemed necessary due to the substantial amount of funds secured in these wallets.

Crypto.com’s Proof of Reserves

Proof of reserves first became an industry obsession following the collapse of FTX, which had misused billions of user funds. Sam Bankman-Fried, its former CEO, was found guilty on multiple counts related to his time at FTX last year. 

Mazars was engaged by Crypto.com to perform an agreed-upon procedure  (AUP) to demonstrate that as of December 7, 2022, Crypto.com had ownership and control of Bitcoin (BTC), Ethereum (ETH), USD coin (USDC) and other cryptos greater than or equal to the balances owed to customers.

Agreed-upon procedures in the crypto sector are somewhat contentious. This is because they don’t offer the exhaustive scrutiny of a full audit, giving only a limited financial overview. This approach raises concerns that people might present reserves in a misleadingly positive light.

Since then, Crypto.com has launched a feature that allows users to verify their balance  with a Merkle Tree. An anonymized proof of client balances that each user can use to prove their crypto balance is included in an exchange’s reserves.

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