Conor Grogan, Head of Product at Coinbase, believes that there is a “small possibility” that the transfer of $8.6 billion worth of Bitcoin (BTC) on July 4 was a hack. Calling his claim “extreme speculation” in an X post on Friday, Grogan said he found the transaction movements to be “extremely odd.” He added:
“If true (again, I’m speculating on straws here), this would be by far the largest heist in human history.”
The transfer of 80,000 BTC
On Friday, eight BTC wallets that had been dormant for 14 years transferred a total of 80,000 BTC, worth around $8.6 billion, according to blockchain analytics platform Arkham Intelligence. The massive scale of the transactions exceeded the gross domestic product (GDP) of Montenegro, a small country nestled in Southeast Europe that ranks 147th in terms of GDP.
The BTC had been moved to the original wallets on 2nd April or 4th May, 2011, Arkham Intelligence noted/ It added that the transactions had been conducted by a “single entity.”
The transactions began with the transfer of 40,000 BTC from a dormant wallet, followed by four transactions of 10,000 BTC each across a total of 10 hours. The Bitcoins have not been sold or further transferred since the five transactions — the BTC is currently held in eight new wallets.
Sani, a Bitcoin maximalist and founder of Timechain Index, believes that the transferred 80,000 BTC belong to Roger Ver, also known as ‘Bitcoin Jesus.’ Ver, an early Bitcoin investor, was arrested in Spain last year on U.S. charges of tax fraud. He allegedly owes the Internal Revenue Service (IRS) at least $48 million in taxes, according to the Department of Justice (DOJ).
Responding to an X user, Sani noted that the transfers could be an indication that Ver has reached a deal with the IRS, and a settlement might be in the pipeline.
Grogan’s theory of hack
Grogan pointed to a Bitcoin Cash (BCH) test transaction that preceded the Bitcoin transfers as potential evidence of foul play. The entity that transferred the 80,000 Bitcoins transferred 10,000 BCH, worth nearly $5 million, and back into one of the original wallets an hour before the transfer of the BTCs began.
Grogan said that there is a possibility the owner of the wallets was trying to discreetly test the private key without attracting attention with the test BCH transaction. This is because BCH transactions are not closely monitored by platforms tracking whale wallets, he said. However, Grogan wrote:
“What makes me say this [BTC transfers were a hack] is the other BCH wallets have not been touched at all; why wouldn’t they also sweep these?”
He further added that he does not believe the transactions were conducted by an exchange because of the BCH test transaction, and since the BTC transactions were executed manually.
Many don’t agree with Grogan’s hack theory
While some X users readily agreed with Grogan’s reasoning, others have ruled out the possibility that the BTC transactions were the result of a hack. Sani, for instance, said he does not think the transactions involved a hack while responding to a user referring to Grogan’s post.
A former Pulsechain developer who goes by ‘bretep’ on X explained that it is practically impossible to hack a specific Bitcoin private key using any current technology. In fact, the chance is one in over 115 quattuorvigintillion (75 zeroes)—a person is more likely to get struck by lightning every day for 10,000 years straight, he explained, adding:
“The security isn’t just strong – it’s mathematically absurd to even attempt with any conceivable technology. With quantum computing, it’d take an estimated 30-40 years, but that is just theoretical at this point.”
An X user who goes by ‘bizzy’ pointed out the logical flaw in Grogan’s conclusion. He stated that a scammer would not have transferred the BCH tokens before the BTC transactions since it could have risked “tipping off the owner.”
Furthermore, barthazian.eth, a pseudonymous X user, claimed that the BCH transaction that Grogan pointed out as suspicious was a handshake transaction, which is common in cases of large over-the-counter transactions.
Additionally, Optimism contributor and former Coinbase product manager Binji Pande noted that the slow pace of execution of the BTC transactions does not point towards a hack. He wrote:
“Given how slowly these sends transpired, it’s hard to be convinced it’s a hack, I’d imagine they would be a bit faster with moving these funds.”