Over 22,000 BTC Flows Out of Coinbase; Users Retaliating to Exchange’s Deal with the US Govt.?
Earlier this week, a massive outflow of funds was registered on US-based cryptocurrency exchange Coinbase.
The exchange saw a negative flow of 22,137 BTC, worth more than $214 million on Monday.
WhaleAlert reported the transfer of 1,975 BTC from Coinbase to an unknown wallet on June 9th. On June 6th three separate transactions were made to unknown wallets of 6,000 BTC, 2,000 BTC, and 1,859 BTC.
Such massive outflow of bitcoin funds came after it became public knowledge that Coinbase would allow the IRS and DEA to use their blockchain surveillance software Coinbase Analytics.
A Delete/Stop Using Coinbase poll conducted on Twitter by trader Josh Rager revealed that 66% of the 5000 respondents are willing to delete to stop using their Coinbase account while only 33% are interested in continuing to use the platform.
But these massive outflows could be just in-house movements as Rafael Schultze-Kraft of Glassnode, a crypto data firm points out, “it's very well possible Coinbase is creating new cold wallets and aiming at reshuffling their funds.”
Coin Metrics co-founder Jacob Franek agrees with this as the destination address looks like an exchange address or mixer and it’s “always possible that a large withdrawal is a cold wallet transfer to a new address (not always easy to verify) unless a single whale withdrew >$22m+. Unlikely that it represents lots of little withdrawals.”
Interestingly, Coinbase is the largest bitcoin holder with 984,300 BTC in its wallets. Coinbase leads with a big margin as it is followed by Huobi (413,000) which doesn’t hold even half of the funds held by Coinbase. The list further moves down to Binance (318k BTC), OKEx (268k BTC), and BitMEX (217k BTC).
But the latest disaster has #DeleteCoinbase trending on Twitter yet again while the exchange maintains that they are not selling personal data of its clients.
“Data in our Analytics tool is fully sourced from publicly available data, and does not include any personally identifiable information,” said John Mart, a Coinbase executive.
Competitor exchange Kraken’s co-founder and CEO Jesse Powell countered if it isn’t augmented by any other information provided by clients.
“It is fully-sourced from public data, so yes, any other company can arrive at the exact same product with publicly available data,” said Mart.
Coinbase’s deal with the IRS and DEA is just the latest piece of information causing a public uproar as people are already fed up with the exchange’s constant service outages during times of bitcoin volatility.