Solved: November's 194,993 BTC transaction was a Bitstamp audit

Home » Solved: November's 194,993 BTC transaction was a Bitstamp audit

Physical_Bitcoin_by_Mike_Cauldwell_(Casascius)Back in November, the Bitcoin community was electrified when at 194,993 BTC transaction was identified on the blockchain, representing about $147 million at the time. Since that time, speculation about what the shift was and why it happened has been rampant, with theories ranging from Richard Branson consolidating his newly revealed wallet to a return of Satoshi Nakamoto to the Bitcoin world.

That speculation was put to rest today when Bitstamp revealed that the move was actually the result of a third-party audit of their funds. The following announcement was posted on their website:

Dear Bitstamp clients,

On November 22nd and 23rd, 2013 an on site due diligence was carried out in respect of Bitstamp Ltd. on behalf of a 3rd party.

Bitstamp’s balance of BTC was validated by temporarily creating the largest single Bitcoin wallet and in the process the largest Bitcoin transaction in history.

The report identified that Bitstamp held 100% of validated BTC balance and USD funds. No material issues were raised as a consequence of the 3rd party’s investigations.

Best regards,
Bitstamp team

This result isn’t unexpected. A Washington Post report predicted that a Bitstamp audit was the cause on November 23.

Why the delay in reporting? This was most likely a result of the audit process, which appears to have only been formally completed on March 6. The transaction of BTC was only one part of the audit, which lasted into December, and the auditors appear to have spent two months compiling and validating the results. Bitstamp likely didn’t want to announce their role until the audit was complete and had confirmed there were no problems at the exchange.

The report is also relevant for another reason, as it may shed some light into the recent movement of some 180,000 BTC from Mt.Gox associated accounts. The massive movement of Bitcoins may be result of an audit of Mt.Gox-held accounts as part of the bankruptcy process.

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