Mysterious Bitcoin Transactions Worth Billions Linked to Bittrex Address Uncovered

By Lujan Odera
Published December 6, 2019 Updated December 6, 2019
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Mysterious Bitcoin Transactions Worth Billions Linked to Bittrex Address Uncovered

By Lujan Odera
Published December 6, 2019 Updated December 6, 2019

For the past 48 hours, rather suspicious activity has been happening on an address associated with Bittrex exchange’s main cold wallet storage whereby a range of large Bitcoin (BTC) transactions have been conducted in what analyst and The Block writer, Larry Cermak, termed as peeling.

“The Art of Peeling”

Peeling is a tactic in the Bitcoin field whereby by large holders of the cryptocurrency sends out a small transaction to one address and follows up with a large transaction to another account. The process is then repeated consecutively for about 100 times in order to mask the transactions from the large output account.

Peeling was, still is, a common tactic that allows (mostly bad) agents of BTC to mask transactions in order to increase privacy and security of the funds. To completely obscure BTC transactions, these agents use a mixer, which mixes the BTC together with other BTC tokens before releasing the coins.

This is what has been happening to the one address allegedly belonging to Bittrex exchange. Around 15 BTC ($111,000 USD) was first sent out before huge transactions of over 55,000 BTC ($410 million USD) followed through raising questions in the community. If the wallet belongs to Bittrex, why should the exchange be carrying out peeling and mixing on users funds?

Or is this yet another on-chain volume metrics manipulation by one of the largest exchanges?

All Eyes on Bittrex

An address registered as the cold wallet storage for Bittrex exchange users has seen a record of outflows since reaching a 120k peak (approximately $1.6 billion) in June this year. Since the peak, the account sent out over 5K BTC through to the end of October, to stand at 115.8 K BTC as of October 28.

BTC Bittrex

Since closing out October, the account has sent out 49,180 BTC, with only about 66,000 BTC currently in the wallet as per Bitcoin info charts. The massive outflow in BTC is a normal occurrence across exchanges as they shuffle their wallets regularly, but with the latest transactions peeled and mixed, questions are raised as to why Bittrex would do this given the BTC they hold is supposedly clean.

Is This Occurrence a Normal One?

Despite the fuss, Udi Werthimer, a cryptocurrency analyst says the current occurrence on Bittrex is a normal one given exchanges do mix their coins. He said,

“Could be any number of reasons really, we’re trying to arbitrarily attach meaning to something that might be entirely meaningless. This ordeal of people getting excited when seeing coins move is going to change within a couple of years or so, just need to bankrupt the plebs first.”

Despite a number of exchanges using similar methods, the amounts attributed to the Bittrex account are huge and it may be a market manipulation tactic. Bittrex is yet to respond to the issue.


The presented content may include the personal opinion of the author and is subject to market condition. Do your market research before investing in cryptocurrencies. The author or the publication does not hold any responsibility for your personal financial loss.
About Author
Lujan Odera
396 Articles
Been in the field since 2015 and he still love everything blockchain and crypto! FC Barcelona fan. Author and journalist. Follow him at @lujanodera.