Ethereum (ETH) Foundation Experiences Renewed Downward Pressure Amidst a Widespread Market Crash

Ethereum (ETH), the second-largest cryptocurrency by market capitalization, has experienced renewed downward pressure amid a widespread market crash.

Rumors circulating on-chain concerning a potential liquidation risk for the Ethereum Foundation (EF) have been largely dispelled by clarifications from crypto news outlet Wu Blockchain, based on analytics from Arkham Intelligence.

The rumors were initially fueled by on-chain analytics service Lookonchain, which flagged a transaction suggesting that a wallet, allegedly belonging to EF, had deposited an enormous amount of ETH into Maker to lower the liquidation price.

“A wallet suspected to be Ethereum Foundation deposited 30,098 ETH ($56.08M) to Maker to lower the liquidation price 5 hours ago,” Lookonchain reported via X. “Currently, this wallet has 100,394 ETH ($182M) on Maker, and the liquidation price is $1,127.06.”

The service noted that the service had a remaining debt position of 78,035,224.7182 DAI, with a liquidation price of around $1,127. This aligns with reports from Wu Blockchain, who stated that the address had received a 4M DAI transfer from the Ethereum Foundation ETH Sale in May 2022.

However, further analysis by Arkham indicated that the wallet’s connections to the Ethereum Foundation might have been exaggerated. The address, it seems, belongs to an early ETH investor who once interacted with EF’s official wallets but has since managed funds autonomously. The deposit of 30,098 ETH was presumably a strategic move to increase collateral and decrease the MakerDAO vault’s liquidation price during a market downturn.

“This address is not directly linked to any official Ethereum Foundation wallets and appears to belong to an early ETH investor who later sold some of their coins to the Ethereum Foundation at the height of the DeFi boom in 2021,” stated Arkham.

This aligns with reports from Wu Blockchain, who noted that the address had received a 4M DAI transfer from the Ethereum Foundation ETH Sale in May 2022.

“Correction: Although 0x22…1246 was flagged by Arkam as a suspected Ethereum Foundation address, on-chain data confirms otherwise,” said Wu Blockchain via X.

The deposits come as Ethereum continues to slip below key technical levels. At press time, ETH traded at $1,925.