A viral claim is spreading across the crypto space, suggesting that Ethereum’s co-founder, Vitalik Buterin, had dumped a massive amount of ETH in a short period. The report has sparked fears of a major price decline, raising investor concerns. It also drew sharp reactions from ETH community members, as debate ignited over whether the sell-off move indicated deeper market weakness or misinformation.
Ethereum Co-founder Dump Claims Shake The Market
Crypto investors and traders were rattled this week after reports claimed Buterin had sold a large portion of his ETH holdings. Market watchers reacted to a widely circulated post, with images alleging that he had dumped 110,000 ETH, worth $170 million, in just a few hours on June 5.
The report also sparked intense concern, with one analyst arguing that if the creator of Ethereum was moving out of the market, investors should also consider doing the same. Another market participant, @CryptoNobler, compared the alleged 110,000 ETH sell-off to a transaction Buterin made three years ago.
The analyst recalled that the Ethereum co-founder had sold all his crypto right before the market crashed, implying insider knowledge. This suggests that the analyst believes that a similar bearish move could be on the horizon.
Another analyst, Midas, reported that the claimed sell-off was one of the largest insider ETH exits he has ever seen. He noted that a sale of that level by a co-founder was a strong bearish signal for the crypto market.
Other social media posts amplified the story further, claiming that Buterin anticipated a major market drop and was allegedly selling his ETH holdings to avoid losses. These analysts are now warning investors to monitor the situation closely, framing it as an event that could influence investors’ sentiment on Ethereum and the broader crypto ecosystem.
Community Pushes Back And Reveals Truth Behind Transaction
Despite the headlines, many in the crypto community quickly challenged the claims, describing the reports as misleading and widely exaggerated. On-chain analysis revealed that the Ethereum cofounder involved was not Buterin but actually Joseph Lubin. They revealed that Lubin had not sold off $170 million worth of ETH but had moved it into a decentralized finance (DeFi) vault. The transaction was designed to reduce liquidation risk on an existing loan.
Data also show that ETH was transferred through DSProxy contracts and used as collateral in the DeFi position, with roughly 178,000 WETH supplied 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 Lubin’s position still holds a net value of about $173 million.
After clarifying the situation, community members criticized the individual spreading the false narrative, noting that they were trying to attract attention by creating viral stories. Given the level of misinformation involved, they urged people to always verify transactions with reputable on-chain tools like Arkham Intelligence or Etherscan before amplifying co-founder dump stories.
