Someone in the eCash telegram channel was recently asking about the address that currently holds over 4.6T XEC, representing roughly 23% of the total circulating supply, so I thought I'd write an article sharing what I know...

The address in question, ecash:qrdraf6aja5hcwxecj9ecc4tgzljfxxnage4ekwd74, was initially funded a little more than 2 years ago on January 9, 2023, when it received a little more than 3.4T XEC in 3 separate transactions all sent within 20 minutes of each other.

If you're wondering where that 3.4T XEC came from, it came from a single address that was itself initially funded 10 days after the BCH/XEC fork on November 25, 2020, with a single transaction worth 657B XEC. (If you've never used a blockchain explorer before, I highly recommend clicking on the links above and trying to understand what a transaction entails.)

While I have no idea who this XEC originally belonged to, it looks like whoever controlled this address intentionally split their BCH and XEC coins as you can see the corresponding BCH being subsequently moved to a new address before being distributed even further, much like you might see from an exchange address.

Meanwhile, the XEC wallet mostly sees large inflows as the address's balance grows from that initial 657B to more than 3.4T over the course of the next couple of years until all of it eventually gets moved to the current address holding more than 4.6T XEC.

So the question is, who controls that address, and is it the same entity that controlled the address from November 2020 where most of the XEC originated from?

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Considering that 657B XEC is the equivalent of 657K BCH, the BCH that the XEC was split from was worth approximately $300M at the time. Whether this was an exchange or just a BCH whale is hard to say, but what we do know is that the split BCH and XEC met very different fates after the fork.

While the BCH went on to be further dispersed across many different wallets, the balance of XEC progressively accumulated as more coins kept being added.

I have always been curious where these trillions of XEC came from. Could this be split XEC that belonged to the customers who held BCH on Coinbase, Gemini, Kraken, and Grayscale at the time of the eCash fork? Instead of rightfully distributing the coins to their customers, did these platforms decide to sell them to the highest bidder instead?

Unless you work for these exchanges, there's no way to know for sure, but what I can say is I'm confident about who controls the top eCash address today.

Thanks to a member of the Korean eCash community, I can say with confidence that the wallet most likely represents Upbit's cold storage address. Upbit is, of course, Korea's largest cryptocurrency exchange, and this hypothesis is further supported by the fact that up until recently, Upbit always had the largest XEC trading volume across all exchanges that have listed XEC.

The reason I'm so confident is because I was provided with two separate transactions, and while both of them originated from two different addresses, those addresses were both funded by ecash:qrdraf6aja5hcwxecj9ecc4tgzljfxxnage4ekwd74 and were among the list of output addresses seen in this transaction. Basically, Upbit appears to use a single wallet address for their cold storage, and 7 different hot wallets for customer withdrawals.

(The person even shared with me a screenshot of their Cashtab wallet corresponding to the exact amount of the withdrawals in question, which were then used to purchase the new XECx token.)

I understand people are concerned seeing so much XEC concentrated in a single address, but I hope you can find some reassurance knowing this address does indeed belong to an exchange and not just a single person.

In an ideal world, so much eCash wouldn't be controlled by a single entity, but the truth is this is the case for many cryptocurrencies out there. For example, it is likely that Coinbase custodies more than 1M BTC belonging to their clients. Similarly, close to 1M BCH is held in one address, a single wallet holds almost 10% of the total DASH supply, and the biggest DOGE wallet holds nearly 20% of the DOGE supply.

So while having 4.6T XEC concentrated in one wallet isn't ideal, I wouldn't panic or lose any sleep over the situation just yet. Hopefully, as eCash adoption rises, we will see more people learn to self-custody and withdraw their XEC from exchanges so they can use their eCash rather than just hodling it.

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