Arkham reject buggy Mt. Gox Alerts to Blame 7% Bitcoin Price Crash

by Arthur · April 26, 2023

The price of Bitcoin (BTC) fell around 7% in just one hour, falling from $29,850 to $27,789, which the media reported was due to blockchain analytics firm Arkham Intelligence mistakenly issuing an alert that wallets linked to Mt. Gox and the US government had begun moving large sums of Bitcoin.

Arkham basically tweeted to confirm that the alleged bug had occurred as a result of “bug fixes” that sent out a false alert on their analytics platform to a “small subset of users.” The alert was then tweeted by the popular crypto news alert account DB or Tier10k.

[DB] Mt Gox and US Government Wallets Making Transactions: Arkham Alert

— db (@tier10k) 26 April 2023

However, an hour later, Arkham published a follow-up tweet claiming that it had “conducted an investigation into the DB Alert situation, and determined that the Arkham alerts were sent accurately in this instance.”

We have conducted an investigation into the DB Alert situation and determined that the Arkham alerts were sent accurately in this case.

DB set two alerts on all Bitcoin transactions over $10k USD, with no counterparties set, then named the alerts “Mt Gox” and “US Gov”.

When we… pic.twitter.com/8OITiygNhL

— Arkham (@ArkhamIntel) 26 April 2023

“Neither the alert nor the tweet could have caused the sharp BTC price drop today,” Arkham wrote, noting that the drop occurred between 19:17 and 20:01 UTC, with the alerts and subsequent tweet sent afterwards at 20:07 UTC and 20 :08 UTC.

Additionally, according to data published by Twitter user IT Tech, there have been no transfers from the wallets associated with Mt. Gox, suggesting that Bitcoin’s flash crash may have occurred for reasons unknown to market participants at the time of writing.

FAKE NEWS about MT Gox wallets executing transactions.

No activity there pic.twitter.com/mdOZv4nzI4

— IT Tech (@IT_Tech_PL) 26 April 2023

According to data from blockchain explorer Blockchain.com, a Bitcoin address believed to be the US government wallet for Silk Road hack funds witnessed a transaction on April 26. However, there was an incoming transaction worth just $0.19 that was still being processed at the time of writing.

Related: First Republic Bank Plunges Another 20% With Bitcoin ‘Poised For $40K’

Regardless of what caused the flash crash, the sudden and steep drop in prices wreaked havoc on the derivatives market, with the total sum of liquidations for crypto market participants currently exceeding $211 million. Bitcoin traders accounted for nearly $97 million worth of these liquidations.