On 19 May, 2019, @Whale_Alert tweeted a transaction of 2000 BTCs between Bitfinex and an unknown wallet, which after in-depth research by a Twitter user, confirmed that it was linked with wash-trading, mixing and laundering of funds. The funds circulated over various exchanges like Bitfinex, Binance, Huobi, Coinbase, and others, raise serious questions regarding AML laws and more.
The flagged was sent from 1HL5rZWw5rGzFAB1mThEMxwazEBtWigs7B to two distinct addresses.
The Twitter user, @Proofofresearch, flagged this transaction and revealed the exchanges involved [directly or indirectly]. The user tweeted,
2/ When we say “Bitfinex deposit address”, that means that the address belongs to a customer at the exchange.
The pictures attached to this tweet show information about the cluster where these funds came from.
Again, I’m using Crystal Blockchain explorer for this.
— CryptoMedication (@ProofofResearch)
The user flagged a few addresses in the clusters which sent a significant amount of funds, shown in the image attached below.
Source: Twitter | CryptoMedication
The entity 145631092, as seen in the above chart, the funds sent by Huobi from this cluster ended on July 21, 2017. Another wallet “17hf5H8D6Yc4B7zHEg3orAtKn7Jhme7Adx”, linked to having transactions with Huobi has one particular transaction that stands out as it has an op_code named “People! help!”, which was transferred on March 30, 2019.
Source: Smartbit
The wallet address “19V5joogtZCCj3YWcP9pNT8eKLSZybc1Kq” has only four transactions in total. Upon checking the previous transaction for this address, the transaction with hash “bee4795db198230d6baad2e9dbba42b597c635b2471101641cce99e1ff0e91e4” stands out, since it is linked to darknet market places, the user tweeted.
Source: Twitter | CryptoMedication
Further, the address “3M1QVCjXn38AUdUxbLCH4WUZc1ai72ZKgr” that sent funds to the above-mentioned wallet, has a strong connection to darknet market places like the Hydra Market place.
Source: Twitter | Cryptomedication
The source of these funds was directly linked again with Hydra Market place, with the user tweeting,
10/ There’s no op_return data for that address, but I can see where the funds came from. So now I’m just going to chase this to the source. It leads to me an interesting cluster ( you can find this here: )
Strong connection w Hydra again.
— CryptoMedication (@ProofofResearch)
The Twitter user further alleged that the addresses linked to these clusters were attached to fraud and some user[s] was “selling accounts at Coinbase/Huobi/Bittrex/Binance.” The Twitter user also urged the compliance team of the respective exchanges to close these flagged accounts ASAP.
The user added that all the funds linked to darknet market places were later deposited in Huobi exchange, which according to the user, gets mixed by Huobi.
Additionally, the user added,
“There are zero customers involved in any of these transactions at this point. That much is obvious. These addresses are not functioning as customer deposit addresses. That’s a guarantee. Funds go to Binance/OKex/Poloniex/BTCBox.com… By FAR, Okex is the most frequent recipient of funds from these Huobi-controlled addresses. Please keep in mind that these are not deposit addresses. These are addresses where Huobi is literally mixing the funds and sending them to other exchanges for some reason.”
One particular address connected to Bitfinex in this fiasco, “1LSgEKji3ZoGdvzBgkcJMej74iBd38fySb,” has received 1 million Bitcoins, according to the user. The user added,
“As stated before, Binance/Coinbase/Bitfinex/Huobi/Bittrex/Coinbase/”Bitbank”/Bithumb/OKex are all pals in this laundering scheme together. They mix and mash funds and operate in a symbiotic fashion – replenishing stores when necessary… In this case, Huobi’s hands are dripping if there’s such a thing as catching someone ‘red-handed’.”
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Published at Wed, 22 May 2019 20:55:17 +0000
