Things are getting more troublesome for the BTC-E exchange as we speak. It appears someone is emptying the company’s Ethereum wallet at an alarming rate. So far, close to the US$90m worth of Ether has been sent to a new address. It is unclear who is the recipient of this fund, though. Many people speculate US law enforcement officials are seizing the funds as they also took control of the company’s domain name.

It is a bit of a  mystery as to who is controlling the BTC-E Ethereum wallet right now. More specifically, no one knows where the funds are being moved to as we speak. One thing no one can deny is how US$90m worth of Ether has been transferred to a new address last night. There are quite a few peculiarities about this transfer, though, to say the least. It seems the first transaction involved 0.0001 ETH being moved to a different account all of a sudden.

Another Plot Twist for the BTC-E Exchange

This seems to indicate someone “tries to see if the system works” before initiating a US$90m transfer. Considering how US law enforcement agencies seized the BTC-E domain, they are the likely culprits in this regard. It is also another clear example of why people should never keep funds on a centralized exchange. The money can be taken from you at any given time, regardless of consent. Users do not control the money stored in an exchange wallet, that much is evident.

Assuming it is the government, there is a chance this money will be returned to users. That will only happen if and when users identify themselves as recipients of the funds, though. That will be quite challenging, to say the least. It is equally possible this money is seized as part of the ongoing Mt. Gox connection. All of this is mere speculation for the time being, though, as it will take time to investigate this matter further. Another possibility is how the US Marshals will auction off these coins in the future.

It is rather interesting to see only Ethereum is affected for the time being.  There are no outbound transfers for either Litecoin or Bitcoin as we speak. Should these funds be dumped across exchanges, the Ethereum price will undoubtedly collapse. The SEC is closely scrutinizing Ethereum-based ICOs as well right now. It is possible that has something to do with these funds being seized. An interesting development that raises more questions than answers.

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