According to data from on-chain transaction tracker Lookonchain, the Ethereum Foundation recently made a major move by depositing 35,000 ETH, worth $94.07 million, on cryptocurrency exchange Kraken. This substantial transaction has raised concerns within the Ethereum investment community, especially since it took place during a small rally in the crypto market as the week came to an end.
The timing and size of this transfer has led to speculation among investors, who are wary of its potential implications. impact on the price of Ethereum and overall market stability. In response to these concerns, Ethereum Foundation CEO Aya Miyaguchi clarified that the transfer was part of the foundation’s routine treasury activities.
She stressed that such transactions are necessary for the foundation’s survival and should not be interpreted as a sign of negative outlook for the market or the future of Ethereum.
Investigation into the transfer of 35,000 ETH
The Ethereum Foundation wallet is one of the largest holders of Ethereum. As such, transfers from the wallet are closely monitored by market participants. Due to the nature of checks and balances, large transactions on the wallet are usually announced in advance by the Ethereum Foundation. However, this was not the case with the recent transfer of 35,000 ETH to Kraken.
After the transaction was revealed on social media platform X by Lookonchain, it generated some reactions from investors. An Ethereum softcore developer, known as antiprosynthesis.eth on the platform, have expressed his concerns by wondering why such an important transaction could take place ‘without a sound’.
In response, Aya Miyaguchi, the director of the Ethereum Foundation, provided some context. She explained that the foundation operates on an annual budget of around $100 million, and many of the recipients of these funds demand payments in fiat currency.
This necessity led to the conversion of ETH to fiat, which led to the transfer to Kraken. This in turn confirmed that the transfer was indeed done for the purpose of selling the ETH tokens. However, she did clarify that the transfer was not a direct sale and that planned and gradual sales would take place from here on.
As for why the community was not notified before the sale, the director said the foundation was advised not to undertake any Treasury activities due to regulatory complications. As such, they could not share the plan in advance.
This is part of our treasury management activities. EF has a budget of ~$100m per year, which is largely made up of grants and salaries, and some recipients can only accept fiat. This year there was a long period where we were advised to do nothing…
— Aya Miyaguchi (ayamiya.eth) (@AyaMiyagotchi) August 24, 2024
Current State of Ethereum
At the time of writing, Ethereum is trading at $2,750. After a few days of bullish action, the crypto appears to be created support around $2,730. According to EtherscanThe Ethereum Foundation wallet currently holds 273,273 ETH worth $752 million. In total, the wallet holds $769 million worth of multiple tokens.
The Ethereum Foundation isn’t the only significant transfer to a crypto exchange in recent days. Whale Alerts noted a recent transfer of 300,000 ETH in Coinbase.
Main image of The US Sun, chart from TradingView