Ethereum Scandal? Buterin Denies Allegations Of ‘ETH Dumping’

In a spirited response to allegations that the Ethereum Foundation has been irresponsibly selling off its ETH holdings, co-founder Vitalik Buterin firmly denied the accusations on X. In an explanation, Buterin provided detailed insights into the Foundation’s financial practices and its contributions to the ecosystem.

The controversy arose after a X user accused the Ethereum Foundation of “dumping” ETH, implying that such actions have negatively impacted the ETH price. Buterin quickly took to X to address these concerns, emphasizing that not only had he not sold any ETH himself recently, but the amount of ETH he holds had actually increased.

Is The Ethereum Foundation Dumping ETH?

On October 26, 2024, he provided a clear rebuttal to the rumors, stating, “I haven’t sold a single ETH in the past month? The amount of ETH I hold has actually gone up.” Addressing further inquiries about the ETH  Foundation’s actions, Buterin elaborated on the significant expenses the Foundation incurs, which are crucial for the development and maintenance of the Ethereum network.

“The ETH foundation is paying researchers and devs that are responsible for [making] Ethereum not bleeding 5M ETH/year to proof of work, your fees being low today, and your transactions getting included in less than 30 seconds instead of like 1-30 minutes (EIP 1559), show some respect” Buterin stated.

Buterin further elaborated on the Foundation’s contributions, detailing several key initiatives that underscore its commitment to technological advancement and network security. He mentioned the development of zero-knowledge (zk) technology, which facilitates private usage of ETH, citing projects like Railway as examples.

Additionally, Buterin discussed the progress in account abstraction technology, which aims to simplify user interactions with Ethereum by eliminating the need for traditional seed phrases and mitigating centralized points of failure reminiscent of the Sam Bankman-Fried (SBF) incident. This innovation “will let normies use ETH safely without seedphrases *or* SBF-style central points of failure,” the ETH co-founder wrote.

Buterin also highlighted the Foundation’s role in fostering a global Ethereum community through local events worldwide. He noted that many of these events often downplay the Foundation’s involvement, yet they play a significant role in disseminating knowledge and fostering collaboration among developers and enthusiasts.

Security and network reliability were other focal points of Buterin’s defense. He proudly stated that Ethereum has maintained zero downtime from denial-of-service (DoS) attacks and consensus failures since 2016. Furthermore, he credited the Foundation’s “various security work (internal dev and grants) that have prevented many losses of funds.”

Buterin concluded by emphasizing the Foundation’s contributions to the broader Ethereum ecosystem, including “libraries in all kinds of code you use (wallets, defi apps…).”

At press time, ETH traded at $2,521.

Featured image created with DALL.E, chart from TradingView.com