Kraken Receives $100M in ETH From Ethereum Foundation Wallet: Impending Sell-Off?

According to data from the on-chain transaction tracker Lookonchain, the Ethereum Foundation recently made a significant move by depositing 35,000 ETH, valued at $94.07 million, into crypto exchange Kraken. This substantial transaction has raised concerns within the Ethereum investor community, particularly since it occurred during a minor crypto market rally as the week came to a close.

The timing and magnitude of this transfer have led to speculation among investors, who are wary of its potential impact on Ethereum’s price and overall market stability. In response to these concerns, Aya Miyaguchi, the director of the Ethereum Foundation, clarified that the transfer was part of the foundation’s routine treasury activities.

She emphasized that such transactions are necessary for maintaining the foundation’s operations and should not be interpreted as a sign of any negative outlook on the market or Ethereum’s future.

Examining The Transfer Of 35,000 ETH

The Ethereum Foundation wallet is one of the largest holders of Ethereum. As such, transfers from the wallet are closely monitored by market participants. For the nature of checks and balances, huge transactions on the wallet are usually made known in advance by the Ethereum Foundation. However, this was not the case in the recent transfer of 35,000 ETH into Kraken.

After the transaction was revealed on the social media platform X by Lookonchain, it generated some comments from investors. One Ethereum softcore developer, known as antiprosynthesis.eth on the platform, voiced his concerns by questioning why such a significant transaction could take place ‘without as much as a peep.’

In response, Aya Miyaguchi, the director of the Ethereum Foundation, provided some context. She explained that the foundation operates with an annual budget of approximately $100 million, and many of the recipients of these funds require payments in fiat currency.

This necessity prompted the conversion of ETH into fiat, which led to the transfer to Kraken. This, in turn, confirmed that the transfer was indeed made in view of selling the ETH tokens. However, she did clarify that the transfer was not a direct sale and that there would be planned and gradual sales from here on.

As for why the community wasn’t notified before the sale, the director said that the foundation was advised not to do any Treasury activities due to regulatory complications. As such, they were unable to share the plan in advance. 

This is part of our treasury management activities. EF has a budget of ~$100m per year, which is largely made up of grants and salaries, and some of the recipients are only able to accept in fiat. This year, there was a long period of time when we were advised not to do any…

— Aya Miyaguchi (ayamiya.eth) (@AyaMiyagotchi) August 24, 2024

Current State Of Ethereum

At the time of writing, Ethereum is trading at $2,750. After a few days of bullish action, the crypto seems to have created support around $2,730. According to Etherscan, the Ethereum Foundation wallet currently holds 273,273 ETH worth $752 million. In total, the wallet holds $769 million worth of multiple tokens. 

The Ethereum Foundation is not the only significant transfer into a crypto exchange in the last few days. Whale Alerts noted a recent transfer of 300,000 ETH into Coinbase.

Featured image from The US Sun, chart from TradingView