Ethereum Price Drop May Be Due to Huge ETH Sell-Off by EOS Team
Huge ETH trading volumes, mostly on cryptocurrency exchange Bitfinex, resulted in an Ethereum price drop of over 8 percent and may be due to a massive sell-off by members of the EOS team right before the EOS initial coin offering (ICO) concludes.
Crypto media outlet Trustnodes report that wallets belonging to members of the EOS team spent around $950 mln in ETH from April 9 to May 9, according to a third-party analysis of data from crypto data feed Santiment.
However, a separate Trustnodes report from May 28 shows that an “incredible trading volume” of around 180,000 ETH was traded within that one hour on Bitfinex, up from around 20,000 ETH an hour average trading volume on Bitfinex and other exchanges such as GDAX and OKex.
Hong Kong-based EOS raised hundreds of millions of dollars in their ICO and have positioned themselves as an alternate blockchain platform that will compete with the likes of Ethereum.
According to Trustnodes, EOS had spent 1 million ETH as of May 24, but had “suddenly” spent another 300,000 ETH on May 28. The EOS crowdsale smart contract shows that the EOS team still have over 200,000 ETH left, while another multi-sig address tagged as EOS-owned shows an additional 900,000 ETH, for a combined total of over 1.1 million ETH, worth about $573.3 million as of May 29.
EOS will conclude their ICO on June 1 and plan to launch their mainnet on June 2. Citizens and residents of the US and China are unable to participate. Chinese digital security company 360 identified a vulnerability in the EOS source code, contributing to a price decline for EOS of over 8 percent on May 28. EOS has since claimed to have corrected the vulnerability.
The US Department of Justice (DOJ) has opened an investigation into price manipulation in Ethereum and Bitcoin, although it’s not clear whether this investigation will have jurisdiction to investigate EOS.