30 May 2023 10:03, UTC
Reading time: ~2 m
Last year in September, a mystery enveloped the crypto world when a startling event transpired on the KuCoin exchange. In a bizarre set of transactions, the popular cryptocurrency exchange inadvertently sent a staggering amount of Ethereum (ETH) — worth tens of millions of dollars — to the Ethereum burn address. Even more surprisingly, it seems this substantial mishap has gone largely unnoticed until now.
The Ethereum burn address, also known as the null address, is essentially a black hole in the blockchain universe. It is an address where tokens can be sent but never retrieved, effectively removing them from circulation — hence the term “burning.”
Thousands of Kucoin deposit addresses sent $10s of millions of dollars of ETH to the Ethereum burn address
This was back in September ’21- I don’t think anyone ever noticed 🤷♂️
If you’ve ever wondered why the null address has so much ETH in it, now you know pic.twitter.com/JPBgxGGOVl
— Conor (@jconorgrogan) May 30, 2023
Given the exchange’s crucial role in securing significant volumes of digital assets, such a transaction raises questions. However, the exact motivation behind this transfer remains elusive, as there is currently no available information to provide insights into the underlying causes.
These unexpected burns occurred over three days, starting on Sept. 7, 2021, and encompassed over 3,500 transactions of USDT (Tether) and ETH. While this incident raises a plethora of questions, the most significant one is: Why? What could possibly lead to such a mistake, or was it intentional? At this stage, answers are unknown.
One hypothesis suggests that KuCoin may have reached a one-off agreement with Bitfinex, the company behind Tether, to redeem USDT. This theory, however, fails to explain why ETH was also sent to the burn address.
Another conjecture points to a potential system glitch or an error in an automated process that caused this unusual movement of assets. Regardless of the speculation, the mystery of why KuCoin would burn such a substantial amount of ETH remains unresolved.
Read the full article here