Coinbase Vitalik Buterin’s favorite exchange

In recent years Coinbase has reportedly been chosen as the main exchange by celebrated Ethereum co-founder Vitalik Buterin.

Arkham Intelligence discovered this by analyzing the public transactions of Buterin’s known wallets.

The Ethereum co-founder has neither confirmed nor denied it, but in theory if Arkham Intelligence’s interpretation is correct, everyone could go and verify this data for themselves on Ethereum’s public blockchain.

Summary

• On-chain transactions reporting to Coinbase
• The other exchanges
• Centralized exchanges
• Coinbase, the preferred choice of Vitalik Buterin

On-chain transactions reporting to Coinbase

In fact, all on-chain transactions are public, but they are also anonymous.

However if the identities of the sender and receiver are known, it is possible to know with certainty how much was sent, when, by whom, and to whom.

As far as Buterin is concerned, it is possible that some of the public addresses of his wallets are known, because he has definitely used them many times before to make transactions, and the recipients of those transactions obviously know the identity of the sender.

So it is not that difficult to know some of his public addresses, partly because Ethereum wallets generally always use only one public address for all transactions.

To avoid this kind of analysis they should instead suggest using a new public address for each transaction, or at least for each individual sender or recipient, as do many Bitcoin-specific wallets.

It is for this reason that Arkham Intelligence has been able to track many of Buterin’s transactions, which were executed several times with well-known public addresses referring to Ethereum‘s co-founder.

As for Coinbase, it is even easier, not least because in recent times centralized exchanges have been competing to provide proof of their reserves held on-chain.

The other exchanges

Indeed, Arkham Intelligence found that Buterin also used five other centralized exchanges, although to a vastly lesser extent.

Since 2015, which is when the Ethereum blockchain was launched, Buterin has reportedly sent $1.06 billion to Coinbase, or 99% of all the funds he has deposited over time on centralized exchanges.

Added to this are $12 million on Kraken, $1.4 million on Bittrex, $550,000 on FTX US, $435,000 on YUNBI, and $300,000 on Gemini.

Curiously, these are US exchanges, including the failed FTX US, but this is easily explained by recalling that Buterin is a Canadian citizen.

Although he was born in Russia, in 1994, already at the age of six he emigrated to Canada, where he went through his entire schooling up to the University of Waterloo then dropped out in 2014 before graduating.

It should be noted, however, that Arkham Intelligence’s data take into account only deposits, not withdrawals. So it is unknown, for example, whether or not the half million dollars deposited on FTX US was withdrawn before the bankruptcy. However, given that Buterin certainly prefers self-custody, it is conceivable that these deposits were never intended to entrust exchanges with long-term custody of funds, but to exchange into other cryptocurrencies or fiat currencies.

Therefore, it is safe to assume that the funds deposited by Buterin on FTX US were sold and then later withdrawn.

Centralized exchanges

However, it is fair to wonder why Buterin chose centralized exchanges. Two points must be made in this regard.

The first is that Arkham Intelligence was not necessarily able to intercept all transactions made by Buterin with all his personal wallets.

It is therefore possible that he also has other wallets that he uses, for example, to interact with decentralized exchanges. It is not known how much he has deposited over time on DEXs, and it is even possible that they are even larger amounts than those deposited on CEXs.

The second is that DEXs do not support fiat currencies. Although stablecoins still offer an on-chain alternative to fiat currencies, sometimes it is just necessary to use fiat currencies.

So it is possible that these funds that Buterin has deposited over the years on centralized exchanges were in fact used to buy fiat currencies by paying in cryptocurrencies. For example, to invest by buying shares in companies it is often necessary, or at least required, to use fiat currencies, so it should come as no surprise that Buterin was also forced to do so.

Coinbase, the preferred choice of Vitalik Buterin

But the main question is probably why Coinbase in particular?

First, as Arkham Intelligence data reveal, because it is a US exchange. Indeed, it is possible that it is much more convenient and safer for Buterin to use US exchanges to conduct fiat currency transactions.

At this point, it is not at all strange that he chose the most solid and important US exchange, as well as the one with the largest volumes.

Moreover, the company that owns and operates it has been listed on the exchange since last year, which gives an additional guarantee of transparency.

In other words, it is possible that he simply chose among the US exchanges the one with the greatest guarantees and liquidity.

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