Someone has transferred ~$1 billion from a bitcoin wallet quiet since 2015

As bitcoin pushes toward new highs, billionaire philanthropist Bill Gates is sounding an alarm on the cryptocurrency's strikingly high carbon footprint–which is only bound to worsen as mainstream adoption of the world's largest cryptocurrency soars as expected.

Key Facts

"Bitcoin uses more electricity per transaction than any other method known to mankind,” Gates told the New York Times in a recent interview, calling himself a "bitcoin skeptic," and adding that "it’s not a great climate thing.”

To Gates' point, Alex de Vries, a data scientist at the Dutch Central Bank, estimates that each bitcoin transaction requires an average 300 kg of carbon dioxide (CO2)–equivalent to the carbon footprint produced by roughly 750,000 Visa swipes.

That's because nearly all cryptocurrencies, bitcoin included, document every single transaction on what's called a public ledger, which helps ensure transactions are transparent and safe from tampering, but continuously requires additional storage space, or "blocks."

Blocks are created by miners, who are awarded bitcoin for their work, running code around the clock on special hardware called rigs–a process that consumes the same amount of energy annually (around 78.5 terawatt-hours) as nations like Chile, Austria and Finland.

Compounding the problem, mining networks are largely based in China, which sources much of its power from fossil fuels like coal, and as the cryptocurrency becomes more popular, its energy consumption has soared by a factor of 10 since just 2017.

"Adding cryptocurrencies to a portfolio will make it less green," says Gerald Moser, the chief market strategist at Barclays Private Bank, adding that mining generates the same amount of electronic waste as countries like Luxembourg, given that mining equipment generally becomes obsolete every 18 months or so.

Crucial Quote

"Mining is a process that makes Bitcoin extremely energy-hungry by design, as the currency requires a huge amount of… calculations for its ultimate goal of processing financial transactions without intermediaries (peer-to-peer)," says de Vries, who created Digiconomist, a website that tracks bitcoin's energy consumption, in 2014.

Surprising Fact

A single bitcoin transaction uses roughly 707.6 kilowatt-hours of electrical energy–equivalent to the power consumed by an average U.S. household over 24 days, according to Digiconomist. On a yearly basis, bitcoin consumes more energy than all but 38 countries, falling in line with countries like Finland, Chile and Austria.

Tangent

China's Inner Mongolia region plans to shut down its cryptocurrency mining projects by April after it failed to meet government-mandated goals for reduced energy consumption in 2019. The U.S. hasn't cracked down federally, but some states–like New York and Washington–have issued restrictions on mining.

Chief Critic

“We believe that cryptocurrency will eventually be powered completely by clean power, eliminating its carbon footprint and driving adoption of renewables globally,” Square CEO Jack Dorsey said in December as the company announced the launch of its Bitcoin Clean Energy Investment Initiative, a $10 million fund for companies making bitcoin mining more energy-efficient.

Tesla's (TSLA) $1.5bn (£1bn) investment in bitcoin (BTC-USD) has a carbon footprint equivalent to the annual emissions of 1.8m cars, according to estimates from Bank of America.

Analysts on the investment bank's global commodity research team on Wednesday published a major report on bitcoin, concluding that the cryptocurrency has a large and growing impact on the environment.

"We believe ESG-minded [environmental, social, and governance] investors have to pay attention to the enormous environmental costs of Bitcoin," Bank of America concluded.

The investment bank calculated that a $1bn investment in bitcoin would produce the same carbon emissions as the annual output of 1.2m cars due to energy usage associated with bitcoin.

Tesla announced a $1.5bn investment in bitcoin last month. Based on Bank of America's figures, the carbon footprint would be equivalent to 1.8m cars.

Critics have already highlighted the environmental impact of Tesla's bitcoin investment, which many argue undermines the electric car maker's green credentials.

Tesla said at the time of its bitcoin investment that it was part of efforts to "further diversify and maximize returns on our cash". The company added that it hoped to accept bitcoin payments in future.

Bank of America poured cold water on this rationale, saying there was "no good reason to own BTC unless you see prices going up."

"Bitcoin has also become correlated to risk assets, it is not tied to inflation, and remains exceptionally volatile, making it impractical as a store of wealth or payments mechanism," Bank of America said in its report. "As such, the main portfolio argument for holding Bitcoin is not diversification, stable returns, or inflation protection, but rather sheer price appreciation, a factor that depends on Bitcoin demand outpacing supply."

Bank of America's research found that:

The bitcoin network's energy usage is already comparable to countries like Greece, the Netherlands, and the Czech Republic;

Energy consumption is comparable to American Airlines or the US Federal Government;

Bitcoin's estimated energy consumption has grown more than 200% in the past two years;

Bitcoin accounts for about 0.4% of global energy consumption at a $50,000 price point;

75% of the network's computer power is based in China, where more than half of all electricity comes from high polluting coal-fired power plants;

Half of all Chinese bitcoin mining is based in the province of Xinjiang, where 80% of power comes from coal;

"A single bitcoin purchase at a price of ~$50,000 has a carbon footprint of 270 tons, the equivalent of 60 ICE [petrol/diesel] cars."

Tesla's (TSLA) $1.5bn (£1bn) investment in bitcoin (BTC-USD) has a carbon footprint equivalent to the annual emissions of 1.8m cars, according to estimates from Bank of America.

Analysts on the investment bank's global commodity research team on Wednesday published a major report on bitcoin, concluding that the cryptocurrency has a large and growing impact on the environment.

"We believe ESG-minded [environmental, social, and governance] investors have to pay attention to the enormous environmental costs of Bitcoin," Bank of America concluded.

The investment bank calculated that a $1bn investment in bitcoin would produce the same carbon emissions as the annual output of 1.2m cars due to energy usage associated with bitcoin.

Tesla announced a $1.5bn investment in bitcoin last month. Based on Bank of America's figures, the carbon footprint would be equivalent to 1.8m cars.

Critics have already highlighted the environmental impact of Tesla's bitcoin investment, which many argue undermines the electric car maker's green credentials.

Tesla said at the time of its bitcoin investment that it was part of efforts to "further diversify and maximize returns on our cash". The company added that it hoped to accept bitcoin payments in future.

Bank of America poured cold water on this rationale, saying there was "no good reason to own BTC unless you see prices going up."

"Bitcoin has also become correlated to risk assets, it is not tied to inflation, and remains exceptionally volatile, making it impractical as a store of wealth or payments mechanism," Bank of America said in its report. "As such, the main portfolio argument for holding Bitcoin is not diversification, stable returns, or inflation protection, but rather sheer price appreciation, a factor that depends on Bitcoin demand outpacing supply."

Bank of America's research found that:

The bitcoin network's energy usage is already comparable to countries like Greece, the Netherlands, and the Czech Republic;

Energy consumption is comparable to American Airlines or the US Federal Government;

Bitcoin's estimated energy consumption has grown more than 200% in the past two years;

Bitcoin accounts for about 0.4% of global energy consumption at a $50,000 price point;

75% of the network's computer power is based in China, where more than half of all electricity comes from high polluting coal-fired power plants;

Half of all Chinese bitcoin mining is based in the province of Xinjiang, where 80% of power comes from coal;

"A single bitcoin purchase at a price of ~$50,000 has a carbon footprint of 270 tons, the equivalent of 60 ICE [petrol/diesel] cars."

Bitcoin is powered by a decentralised network of computer "miners", which process transactions in return for rewards. Tasks get harder as the network grows and rewards — in bitcoin terms — get smaller, meaning more computer power is needed. That, in turn, leads to greater CO2 emissions due to higher electricity usage.

Bank of America's experts said there was a "relatively linear relationship between bitcoin prices and bitcoin energy use." Higher prices lead to more emissions, as the promise of bigger rewards — in dollar terms — lures more miners.

"The rising complexity of the system creates ultimately a vicious environmental cycle of rising prices, rising hashpower, rising energy consumption and, ultimately, rising CO2 emissions," analysts wrote.

Furthermore, analysts concluded that it takes a relatively small amount of money to move prices higher. The paper concluded that inflows of just $93m would push bitcoin's price up by 1% — 20 times less than the level it would take to move gold up 1%.

"We do not find many other human activities that have a higher carbon footprint per dollar of inflow," analysts said. "As a reference point, we calculate that a $1bn dollar inflow into bitcoin is equal to 1.2 million cars driven over the course of a year or 12.7 million barrels of oil.

"With limited amounts of capital pushing prices higher... rising bitcoin prices can quickly lead to astronomical CO2 emissions."

Renewed focus on bitcoin's carbon footprints comes amid a surge in the cryptocurrency's price. Bitcoin has risen over 400% since last October, recently reaching a new all-time high of more than $61,000. The rally has coincided with a flurry of interest from institutional investors and major corporations.

In the months between Donald Trump’s election and his inauguration, cryptocurrency prices soared on speculation that the president would appoint crypto-friendly regulators and set up a “strategic bitcoin reserve.” Trump has delivered on the regulatory front: The Securities and Exchange Commission has a new pro-crypto commissioner and has dropped or paused lawsuits against crypto exchanges. Trump also issued an executive order in his first week calling for an evaluation of the “potential creation and maintenance of a national digital asset stockpile.” Still, crypto prices fell sharply after he took office; the slide has intensified in the past couple of weeks. And that has caused considerable discontent among Trump’s major backers in the industry. So, in what certainly looked like an attempt to halt the drop, Trump took to social media over the weekend and promised that a “Crypto Strategic Reserve” would soon be on the way, and that the government would be filling it with not only bitcoin and ether (the two biggest crypto assets) but also more speculative assets such as ripple, solana, and cardano.

Trump’s announcement initially had the desired effect: The prices of bitcoin and ether each rose more than 10 percent on the news, while the total value of crypto assets jumped by more than $300 billion. But over the course of yesterday, many of those gains were given back, in part because of uncertainty about exactly what Trump was promising and whether he can deliver. The government already owns about $17 billion in bitcoin, and another $110 million or so in ether, most of which it has seized from criminals; one option would be for it to simply hold on to those assets. But what the crypto advocates want, and what Trump seems to be promising, is for the government to fill this new strategic reserve by buying billions of dollars’ worth of crypto assets.

What they hope for, in other words, is a handout for crypto holders—or, from the point of view of non-crypto-holding Americans, a misbegotten government backstop for purely speculative assets. Filling a crypto reserve would effectively represent a huge transfer of wealth from taxpayers to crypto HODLers (a nickname derived from a common online typo of hold, also said to stand for “hold on for dear life”). That’s an abysmally bad idea, especially at a time when, in the name of efficiency, the Trump administration is slashing other government programs and spending.

The phrase strategic crypto reserve (or, more commonly, strategic bitcoin reserve) is of course intended to draw a parallel between this putative crypto hoard and the Strategic Petroleum Reserve, a stockpile maintained by the Department of Energy that consists of hundreds of millions of barrels of oil. The genuinely strategic reasons for having the government own an oil reserve are obvious: Oil is essential to the functioning of the U.S. economy. In the event of an oil embargo, such as the one in 1973, or major disruption to oil-supply chains, the strategic reserve has historically helped keep things running (even if the growth in domestic oil and gas production has now made the U.S. less vulnerable to such shocks).

In contrast, the government has no strategic reason to own crypto assets. They have no use value either to the U.S. government or to the American economy. We can get along without them just fine. Crypto advocates point to the fact that the United States does hold reserves of foreign currencies, and has a large hoard of gold as well. But the U.S. actually holds very little foreign-exchange moneys, and the foreign currencies it does own are held in the event that it needs, or wants, to exchange them for dollars—as a hedge, for example, against a situation when the dollar is falling sharply and the government buys its own currency to prop up its value. That’s a very unlikely scenario to begin with—the U.S. has never used its foreign-exchange hoard to fend off a speculative decline in the dollar’s value—and, in any case, no such use case exists for bitcoin or other crypto assets.

As for American gold holdings, they’re essentially pointless: Fort Knox is a legacy of the days when the U.S. promised to exchange gold for dollars on demand. Today, the U.S. holds on to its gold solely out of inertia—and perhaps a desire to not crash the market by dumping the stash or incur political blowback for liquidating the reserve from Americans who still think that the Gold Standard is a thing. None of that is an argument for adding a new hoard of digital assets.

Crypto advocates also argue, mysteriously, that for the U.S. to have large stores of bitcoin and other crypto assets would strengthen the dollar. But the dollar is a fiat currency, which means that its value does not depend on the backing of any assets the government owns. More to the point, bitcoin was created to be an alternative to the dollar, not a support for it. Far from strengthening the dollar, having the U.S. purchase billions of dollars of assets that were created to be alternatives to the dollar would at best be economically pointless and at worst would actually weaken confidence in the dollar. Nothing says “We’re worried about the future value of our currency” like having a government purchase billions of dollars’ worth of speculative alternative currencies.

What crypto advocates really mean when they say that buying crypto will strengthen the value of the dollar is that crypto prices will keep going up, which in turn will make the U.S. richer. But any gains in the value of a crypto stash would be trivial relative to the size of the U.S. budget. Either way, requiring the government to wager on tremendously volatile assets is a reckless use of taxpayer funds. What next—a federal Department of Sports Betting?

So far, Trump has been cryptic, so to speak, about how the assets for a crypto reserve will be acquired. Some schemes, for instance, call for the government to sell some of its gold reserve to pay for the assets. One way or another, however, any acquisition of crypto assets will require the government to dedicate financial resources to crypto that it could use otherwise—to reduce the budget deficit or spend on government programs.
Last, but not least, a crypto reserve would be a ready-made vehicle for corruption, creating colossal conflicts of interest over corporate regulation and government policy generally. Being included in a government reserve would be a huge boost to crypto assets, particularly less established ones. That would create major financial incentives for crypto bros to try to win favor with Trump, who himself has a huge stake in the memecoin $TRUMP. Committing the government to buying crypto would essentially institutionalize his administration’s accumulating conflicts of interest.

All of this is hardly a surprise coming from Trump, for whom patrimonial governance and self-dealing are a way of life. In that sense, he may have no reputational risk, but the U.S. government certainly does, as an issuer of debt, as well as a creditor of last resort. The crypto advocates’ embrace of a crypto reserve speaks to the way that bitcoin and its peers have evolved from being revolutionary alternatives to the traditional financial system into little more than speculative vehicles; now the crypto lobby is asking Uncle Sam to inflate and support their prices. A crypto reserve would be a government-backed grift—one that makes the government itself the easy mark.

The U.S. Marshals Service (USMS) is responsible for managing assets seized by law enforcement during criminal investigations, including real estate, cash, jewelry, antiques, and vehicles. It is also tasked with handling cryptocurrencies, such as the billions of dollars’ worth of Bitcoin (BTC) seized from the Silk Road marketplace by the FBI in 2013.

However, the USMS appears to have no clear idea of how much crypto it actually holds. In fact, the agency is struggling to estimate even its Bitcoin reserves, a source familiar with the matter told CoinDesk.

This could pose a significant issue, especially in light of White House Crypto Czar David Sacks’ recent announcement that the U.S. government is exploring the creation of a national crypto reserve. This initiative could mean halting the liquidation of seized digital assets—or even purchasing additional cryptocurrencies.

"When you're talking about reserves, you need to understand the unique properties of these assets—like forks, airdrops, and constant volatility," said Les Borsai, co-founder of Wave Digital Assets, a firm specializing in digital asset management. Borsai, whose company was not selected for a USMS contract, told CoinDesk that federal agencies need to either educate themselves on crypto or work with professionals who can manage these assets properly.

Even if the U.S. crypto reserve never materializes, the USMS still plays a critical role in managing and liquidating seized digital assets, as asset forfeiture helps fund the Department of Justice (DOJ).

But according to Chip Borman, vice president at Addx Corporation, a company that provides technology solutions to the U.S. government, the USMS is handling its crypto operations in an alarmingly outdated manner.

"As far as I know, the USMS is currently managing all of this with individual keystrokes in an Excel spreadsheet," Borman told CoinDesk. He observed the agency’s processes firsthand in 2023 and warned, "They’re one bad day away from a billion-dollar mistake."

A Troubled History of Crypto Mismanagement

Issues with the USMS and crypto asset management are nothing new. Timothy Clarke, CEO of ECC Solutions and a former special agent at the Department of Treasury, said the agency has faced longstanding criticism from both public and private sectors over the years.

As recently as 2019, the USMS was only handling a handful of cryptocurrency assets—fewer than 10, Clarke told CoinDesk. This meant that other government agencies had to manage their own seized crypto, instead of having the USMS act as a central repository.

Clarke also described alarming security lapses in how the USMS handled Bitcoin deposit addresses. When agencies needed to send seized crypto, the USMS would take weeks to provide an address—and when they finally did, it was simply sent via unencrypted email with no verification process.

By contrast, agencies like IRS Criminal Investigation (IRS-CI) use much stricter security protocols—including video calls, encrypted read-only attachments, and follow-up verification calls—to ensure that crypto wallets are handled securely.

"It was very, very unsecure," Clarke said. "It’s just shocking that nothing happened during all the years they operated like that." source

On the night of Feb. 21, Ben Zhou, the chief executive of the cryptocurrency exchange Bybit, logged on to his computer to approve what appeared to be a routine transaction. His company was moving a large amount of Ether, a popular digital currency, from one account to another.

Thirty minutes later, Mr. Zhou got a call from Bybit’s chief financial officer. In a trembling voice, the executive told Mr. Zhou that their system had been hacked.

“All of the Ethereum is gone,” he said.

When Mr. Zhou approved the transaction, he had inadvertently handed control of an account to hackers backed by the North Korean government, according to the F.B.I. They stole $1.5 billion in cryptocurrencies, the largest heist in the industry’s history.

To pull off the astonishing breach, the hackers exploited a simple flaw in Bybit’s security: its reliance on a free software product. They penetrated Bybit by manipulating a publicly available system that the exchange used to safeguard hundreds of millions of dollars in customer deposits. For years, Bybit had relied on the storage software, developed by a technology provider called Safe, even as other security firms sold more specialized tools for businesses.

The hack sent crypto markets into a free fall and undermined confidence in the industry at a crucial time. Under the crypto-friendly Trump administration, industry executives are lobbying for new U.S. laws and regulations that would make it easier for people to pour their savings into digital currencies. On Friday, the White House is scheduled to host a “crypto summit” with President Trump and top industry officials.

Crypto security experts said they were troubled by what the heist revealed about Bybit’s safety protocols. The losses were “completely preventable,” one security firm wrote in an analysis of the breach, arguing that it “should not have happened.”

Safe’s storage tool is widely used in the crypto industry. But it is better suited to crypto hobbyists than exchanges handling billions in customer deposits, said Charles Guillemet, an executive at Ledger, a French crypto security firm that offers a storage system designed for companies.

“This really needs to change,” he said. “It’s not an acceptable situation in 2025.”

At Bybit, the hack set off a frantic 48 hours. The company oversees as much as $20 billion in customer deposits but did not have enough Ether on hand to cover the losses from the $1.5 billion heist. Mr. Zhou, 38, raced to keep the business afloat by borrowing from other firms and drawing on corporate reserves to meet a surge of withdrawal requests. On social media, he seemed surprisingly relaxed, announcing a few hours after the theft that his stress levels were “not too bad.”

As the crisis unfolded, the price of Bitcoin, a bellwether for the industry, plunged 20 percent. It was the steepest drop since the 2022 failure of FTX, the exchange run by the disgraced mogul Sam Bankman-Fried.

In an interview this week, Mr. Zhou acknowledged that Bybit had advance warning about possible problems with Safe. Three or four months before the hack, he said, the company noticed the software was not fully compatible with one of its other security services.

“We should have upgraded and moved away from Safe,” Mr. Zhou said. “We’re definitely looking to do that now.”

Rahul Rumalla, Safe’s chief product officer, said in a statement that his team had created new security features to protect users and that Safe’s products were “the treasury backbone for some of the largest organizations in the space.”

“Our job is not just to fix what happened,” Mr. Rumalla said, “but to ensure the entire space learns from it, so this doesn’t happen again.”

Founded in 2018, Bybit operates as a crypto marketplace, where day traders and professional investors can convert their dollars or euros into Bitcoin and Ether. Many investors treat exchanges like Bybit as informal banks, where they deposit crypto holdings for safekeeping.

By some estimates, Bybit is the world’s second-largest crypto exchange, processing tens of billions of dollars every day. Based in Dubai, it does not offer services to customers in the United States.

On Feb. 21, Mr. Zhou was at home in Singapore, finishing up some work, he said in the interview.

But first, he and two other executives needed to sign off on a transfer of cryptocurrencies from one account to another. These routine transfers are supposed to be secure: No single person at Bybit can execute them, creating multiple layers of protection from thieves.

Behind the scenes, however, a group of hackers had already broken into Safe’s system, according to Bybit’s audit of the hack. They had compromised a computer belonging to a Safe developer, a person with knowledge of the matter said, enabling them to plant malicious code to manipulate transactions.

A link sent via Safe invited Mr. Zhou to approve the transfer. It was a ruse. When he signed off, the hackers seized control of the account and stole $1.5 billion in crypto.

The sudden outflows showed up on the blockchain, a public ledger of crypto transactions. Crypto analysts quickly identified the culprit as the Lazarus Group, a hacking syndicate backed by the North Korean government.

That night, Mr. Zhou went to Bybit’s Singapore office to manage the crisis. He announced the hack on social media and started a crisis protocol known at the company as P-1, pressing a button to wake up every member of the leadership team.

Around 1 a.m., Mr. Zhou appeared on a livestream on X, swigging a Red Bull. He promised customers that Bybit was still solvent.

“Even if this hack loss is not recovered, all of clients assets are 1 to 1 backed,” he said in a post. “We can cover the loss.”

Those assurances were not enough. Within hours, Mr. Zhou said, about half the digital currencies deposited on the platform, or close to $10 billion, had been withdrawn. The crypto market plunged.

To limit the damage, other crypto companies offered to help. Gracy Chen, the chief executive of a rival exchange, Bitget, lent Bybit 40,000 in Ether, or roughly $100 million, without requesting any interest or even collateral.

“We never questioned their ability to pay us back,” Ms. Chen said.

Between crisis meetings, Mr. Zhou provided a running commentary on X. He shared screenshots from a health app, showing his stress levels were surprisingly normal.

“Too focused commanding all the meetings. Forgot to stress,” he wrote. “I think it will come soon when i start to really grasp the concept of losing $1.5B.”

After looting Bybit, the North Korean hackers spread the stolen funds across a vast web of online crypto wallets, a money-laundering strategy that they had also employed after other heists.

“Lazarus Group is on another level,” Haseeb Qureshi, a venture investor, wrote on X after the theft.

Security experts blamed Bybit for putting itself at risk. To authorize the routine transfer that led to the hack, Mr. Zhou said, he used a hardware tool designed by Ledger, the crypto security firm. The device was not in sync with Safe, he said. So he could not use the tool to check the full details of the transaction he was approving, always a risky practice in the crypto world.

“Safe just does not give you the kinds of controls that you would want if you’re going to be frequently making operational transfers,” said Riad Wahby, a computer engineering professor at Carnegie Mellon University and a co-founder of the digital security firm Cubist.

Mr. Zhou said he wished he had taken action sooner to bolster Bybit’s defenses. “There’s a lot of regrets now,” he said. “I should have paid more attention on this area.”

Still, Bybit continued operating after the hack, processing all the withdrawals within 12 hours, Mr. Zhou said. Not long after the breach, he announced on X that the company was moving around another $3 billion in crypto.

“This is planned manoeuvre, FYI,” he wrote. “We are not hacked this time.”