A viral claim is spreading across the crypto space, suggesting that Vitalik Buterin, co-founder of Ethereum, had dumped a massive amount of ETH in a short period of time. The report raised fears of a significant drop in prices, causing concern among investors. This also sparked strong reactions from members of the ETH community, as a debate ignited over whether the selling movement indicated deeper market weakness or misinformation.
Ethereum Co-Founder Says Dump Is Shaking Up the Market
Crypto investors and traders were shaken this week after reports Buterin had sold a large part of his ETH holdings. Market watchers reacted to a widely circulated article, with images claiming that it had dropped 110,000 ETH, worth $170 million, in just a few hours on June 5.
The report also raised serious concerns, analyst argue that if the creator of Ethereum leaves the market, investors should also consider doing the same. Another market player, @CryptoNobler, compared the alleged sale of 110,000 ETH following a transaction made by Buterin three years ago.
The analyst recalled that the The co-founder of Ethereum sold all his cryptocurrencies just before the market crashes, which implies insider knowledge. This suggests that the analyst believes a similar bearish move could be on the horizon.
Another analyst, Midas, reported that the claimed sale was one of the largest ETH insider exits he had ever seen. He emphasized that a sale of this level by a co-founder was a strong bearish signal for the crypto market.
Other social media posts further amplified the story, claiming Buterin had anticipated a significant drop in the market and reportedly sold his ETH holdings to avoid losses. These analysts are now warning investors to monitor the situation closely, presenting it as an event that could influence investors’ decisions. sentiment on Ethereum and the broader crypto ecosystem.
Community Pushes Back and Reveals Truth Behind Transaction
Despite the headlines, many in the crypto community were quick to dispute these claims. describing reports as misleading and greatly exaggerated. On-chain analysis revealed that the Ethereum co-founder involved was not Buterin but actually Joseph Lubin. They revealed that Lubin had not sold $170 million worth of ETH but had transferred it to a decentralized finance (DeFi) vault. The transaction was intended to reduce the risk of liquidation on an existing loan.
The data also shows that ETH was transferred via DSProxy contracts and used as collateral in the DeFi position, with approximately 178,000 WETH provided and $103 million DAI borrowed against it. This is a standard liquidity management strategy in the DeFi space, allowing holders to maintain full exposure to ETH while borrowing stablecoins. Community members also confirmed that no ETH had entered the open market and that Lubin’s position still holds a net worth of approximately $173 million.
After clarifying the situation, community members criticized the individual spreading this false narrative, pointing out that he was trying to gain attention by creating viral stories. Given the level of misinformation involved, they exhorted people should always verify transactions with reputable on-chain tools like Arkham Intelligence or Etherscan before amplifying co-founders’ dumping stories.
Featured image from iStock, chart from Tradingview.com
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