Whodunit? Seven Theories for the Mystery $1 Billion Bitcoin Movements
09.06.2018

A mystery is afoot. Close to $1 billion worth of long-stagnant bitcoin recently moved from possibly Silk Road-connected wallets to a number of different sub-wallets, sparking much intrigue and several lengthy debates on Reddit (among other places for crypto-chatter).

Seven days ago, Reddit user sick_silk alerted readers to the unusual activity and requested help in getting to the bottom of it. Apparently, about a week ago, funds tied to a cold storage wallet that had since been split up among a few other sub-wallets started moving around again. Sick_silk tracked the coins, finding that the original wallet’s owner divided them first into 60,000-coin chunks, then 30,000, then 20,000, and so on until the latest activity, which brought the owner to nearly $1 billion (more like $844 million when sick_silk’s post published) worth of 100-coin wallets. The last activity by the funds’ owner took place in March 2014, according to the post.

This could only be the work of a criminal mastermind—or a group of organized crypto whales, or Craig Wright. It depends on which Redditor you ask. Instead of having to do that, here are the seven theories proposed on the “front page of the internet” and beyond, put forth by some very thoughtful and dedicated independent sleuths (and some not-so-thoughtful ones).

  1. The Silk Road connection

A bitcointalk.org post from October 14, 2013 connects the original wallet in question to the Dread Pirate Roberts, or DPR, the name for the Silk Road’s once enigmatic proprietor. That proprietor, of course, turned out to be Ross Ulbricht, who was apprehended by police 13 days before that Bitcointalk thread began. Yet in between Ulbricht’s arrest and chatter about the original wallet (1933phfhK3ZgFQNLGSDXvqCn32k2buXY8a) on Bitcointalk, someone sent about 3.5 bitcoin in two separate payments to the wallet on October 9, 2013.

Ulbricht’s been in prison since his 2015 conviction on counts of money laundering, conspiracy to traffic narcotics, and computer hacking. So who’s moving the bitcoin now? Who sent the mysterious payments on October 9, 2013, when Ulbricht was in custody?

As in The Princess Bride, the 1987 movie that inspired DPR’s name in which one DPR succeeds his predecessor and takes on his identity, many have theorized that there was more than one Silk Road head honcho. If you want to go down that rabbit hole, you can.

Shortly after the exchange shut down, CEO Mark Karpeles “found” around 200,000 bitcoin in a wallet formerly “believed” to be empty. 

2. Mt. Gox at it again

Mt. Gox, the infamous exchange that lost millions worth of bitcoin in 2014, is no stranger to fishy bitcoin situations. In March 2014, shortly after the exchange shut down, CEO Mark Karpeles “found” around 200,000 bitcoin in a wallet formerly “believed” to be empty. The “finding” took place after the wallet was “rescanned and [its] balance researched,” Karpeles told The Guardian at the time.

Wallets connected to the mysterious $1 billion in bitcoin experienced activity in March 2014, which lines up with Mt. Gox’s 200,000 bitcoin discovery. Coincidence? Or something else?

3. Silk Road and Mt. Gox overlap

The two above theories raise an important third one. Is Karpeles himself another iteration of DPR? On that note, is Satoshi Nakamoto DPR, like, the Ross Ulbricht one? If Ulbricht is Nakamoto, then who is Karpeles? These are all questions.

4. An unknown early bitcoin adopter raring to “rinse and repeat”

Forget the big names. This mystery wallet-holder may just be an unknown finally deciding to make a stir in the crypto market—a secretly bitcoin-wealthy parents’ basement-dweller cackling to himself, “Look at me now, Mom!” as he rubs his hands in anticipation of the havoc he’ll wreak on the unsuspecting crypto-holding masses.

He (or, okay, she) may be preparing to start a “rinse and repeat” trading cycle, as suggested by Tanzeel Akhtar at TheStreet. That’s the tactic in which someone who holds a lot of bitcoin starts selling them off at a lower than market price, causing the value to decrease overall. When it’s nice and low, the seller buys all their bitcoin back at a cheaper price. Then he moves out of his mother’s basement.

5. Craig Wright

Court documents detailing a lawsuit that alleges Craig Wright (the self-proclaimed Satoshi Nakamoto) stole about $5 billion worth of bitcoin from his former, now-deceased partner Dave Kleiman (a whole other story) include mention of “Bitcoin wallet 1933***XYa8,” held by Wright in escrow. This wallet address is eerily similar to the original wallet involved in the case of the mysterious moving bitcoin. Eerily similar. The last two characters in the wallet are reversed—but that could mean something.

Sometimes masterminds just want to get recognition for their work.

6. “Dr. Evil is moving his coins.”

The many theorizers who failed to float this possibility ignored perhaps the biggest clue available—the amount of money on the move. Fortunately, Redditor talanhorne has seen Austin Powers and understands the significance of $1 billion.

7. The OP did it.

Finally, the most compelling theory of them all: sick_silk, the original poster (“OP”) on Reddit who made a point to bring this $1 billion in bitcoin movement to the attention of the internet, is the owner of the original wallet.

Here are the facts: Sick_silk created their Reddit profile the day before posting about the shifting bitcoin funds. As Redditor whooki3 astutely pointed out, everything the OP has posted since has been about tracking down the owner of that bitcoin. “I believe everyone has an incentive,” whooki3 writes the OP. “What’s yours?” The kind of person who does this level of research has got to have some incentive.

Sometimes masterminds just want to get recognition for their work.