In a recent discovery, thousands of Kucoin deposit addresses have been found to have transferred tens of millions of dollars worth of Ethereum (ETH) and Tether (USDT) to the Ethereum burn address back in September 2021. The news, revealed by Conor, Director at Coinbase, had seemingly gone unnoticed until now.
From September 7, 2021, over 3500 transactions involving ETH and USDT occurred for three consecutive days, all directed toward Ethereum’s invalid address. This concrete action should have been more considered, considering the amount involved and the implications it could have.
The invalid address called the burn address, is essentially a one-way destination. Any digital assets transferred to this address are nearly “burned,” becoming irretrievable and effectively removed from the active circulating supply.
It’s common for developers to burn tokens to regulate supply and demand. Still, this instance is unusual due to the amount involved and the platform from which the tokens originated.
Conor further postulated that there may have been an agreement with Bitfinex, a cryptocurrency exchange with close ties with the stablecoin USDT, to redeem the Tether sent to the burn address. However, the speculation offers no definitive explanation for burning such a substantial amount of ETH.
The exact reasons behind this significant transfer remain speculative at best. Kucoin or Bitfinex has issued no official statement or explanation about these transactions. The discovery highlights the complexities and sometimes opaque transactions in cryptocurrency, raising more questions than it answers.
However, this finding explains a significant amount of ETH held in the Ethereum invalid address. Ethereum’s users and analysts may find this helpful revelation in understanding the state of the cryptocurrency and potentially the decisions behind these actions.
