Ethereum Foundation clears the air on $100 million transfer

Yesterday, the Ethereum Foundation moved 35,000 ETH—about $94.07 million worth—to a Kraken deposit address, according to data from Arkham. The crypto community, already on high alert, started firing up speculations. 

Is the foundation cashing out for a rainy day, or is something more sinister happening behind the scenes? People started asking questions, and the internet got noisy. 

The foundation then came out with a statement to calm everyone down. Aya Miyaguchi addressed the situation, saying: 

“This is part of our treasury management activities. EF has a budget of ~$100 million per year, which is largely made up of grants and salaries, and some of the recipients are only able to accept in fiat.”

Aya explained that the transfer doesn’t mean the foundation is making a massive sell-off. Instead, they’re doing some routine financial housekeeping.

She mentioned that due to regulatory issues, they were advised not to make any big moves for a while. That left them a bit stuck, and they couldn’t talk about their plans beforehand. 

Now, they’re moving carefully, making gradual sales, and ensuring things don’t go haywire. But if you think that’s where the drama ends, you’re wrong. The foundation’s financial maneuvers are just one part of a much bigger picture.

Insider trading?

Let’s not forget the big rumor mill that kicked off earlier this year. Allegations of insider trading have been swirling around the Ethereum Foundation like a dark cloud.

Apparently, some folks in the foundation might have been playing a dirty game—using inside information to make trades before the rest of us even had a clue. 

We’re talking about potentially knowing ahead of time about Ethereum’s development updates, partnerships, and all the juicy bits that can make or break a coin’s value.

You pull a stunt like insider trading, and suddenly, everyone’s pointing fingers and crying foul. The Ethereum Foundation, of course, hasn’t confirmed any of these rumors, but the lack of a strong denial or any real comment isn’t doing them any favors either. 

Hacks, breaches, and a whole lot of headaches

If the insider trading allegations weren’t enough, let’s throw in some good old-fashioned hacks. The Ethereum ecosystem has had its fair share of security nightmares, and June 2024 was no different. 

The Loopring protocol got exploited, and $5 million worth of ETH vanished into the ether—no pun intended. Now, this wasn’t directly the foundation’s fault, but let’s be real. 

When your ecosystem has more holes than Swiss cheese, people are going to start pointing fingers. If they’re not safeguarding their own backyard, how can anyone else feel safe building on their turf?

Transparency—or the lack of it—is another hot button issue here. Critics have been pretty vocal about the Ethereum Foundation’s financial dealings.

People want to know where all that money from the initial coin offering (ICO) and other donations went. We’re talking about millions, maybe even billions, in today’s market. 

And yet, there’s a lot of mystery around how the foundation allocates these funds. Aya and her crew can talk about budgets and expenses all they want, but until there’s a clear, detailed report, people are going to be suspicious.