SpankChain, an Ethereum-based blockchain platform designed to help adult content creators cut out traditional banks and intermediaries, has closed its crypto payment processor, SpankPay. The closure comes after the company lost its payment service provider, Wyre, in February due to “violations of any third-party payment processor or network rules.” SpankPay attempted to find another service provider, but all attempts were rejected due to the adult industry nature of their business.
In a Twitter thread, SpankPay announced that the decision to close the payment processor was due to the escalating hostility of the banking environment towards adult industry payment processors, which had made it untenable for the small team and niche market it served. Despite the shutdown, the company reassured users that their money was safe and would be returned as soon as possible.
SpankPay was launched in July 2019 as an adult-industry-friendly payment solution that enabled adult entertainers and merchants to accept cryptocurrency for their services. The closure of SpankPay is a significant blow to SpankChain, as the platform was a key part of its blockchain ecosystem.
The adult entertainment industry has always faced challenges with traditional banking systems, as banks have been reluctant to work with the industry due to its controversial nature. SpankChain sought to change this by providing a blockchain-based platform that allowed adult content creators to transact directly with their customers, cutting out traditional intermediaries.
The closure of SpankPay highlights the ongoing challenges faced by the adult entertainment industry in accessing traditional banking services. The industry has been forced to rely on alternative payment methods, such as cryptocurrencies, to transact with customers. The use of cryptocurrencies has enabled adult content creators to access a global market and avoid the restrictions imposed by traditional banks.
Despite the challenges, SpankChain remains committed to advancing the adult industry and has promised to continue developing and investing in products that serve the niche market it serves. The closure of SpankPay is a significant setback for the company, but it is determined to continue to innovate and find new ways to help adult content creators succeed in the digital age.
Whales can be bashful and clever creatures, but when you manage to catch one in action it’s a sight to behold — consider, for instance, the single entity responsible for depositing 100k ETH into the Eth 2.0 deposit contract from 133 different addresses last week.
Deposits into the ETH 2.0 staking contract have been picking up as of late, with 100k ETH pouring into the Eth 2 deposit contract on a single day last week. It caught the attention of the crypto space and, like most stories about on-chain activity, looking at the actual transactions and associated accounts can shed light on what went down. In this case, it seems the 100k ETH influx can be traced back to a single Ethereum address and a wallet that is responsible for funnelling upwards of 258k ETH ($541.8 million at 2100 per ETH) into the deposit contract.
Searching for the mega whale who is mega bullish ETH and Eth 2.0
Given the relatively steady increase the deposit contract has seen since launching in December, it is likely a single entity was behind last week’s unexpected surge. But can we prove it? Can it be reasonably shown that a single entity was behind the 100k ETH worth of deposits?
Unfortunately, actually finding the transactions and addresses on-chain was not a quick “first page of Etherscan” find.
In hopes of getting a quick win, the first place we checked was the largest total deposits made by a single address to the deposit contact. While this strategy did find one address that had recently deposited some 12,800 ETH across 400 transactions to the deposit contract, unfortunately, it was not the address of interest, as the date of the transactions (June 20, 2021) is a couple days too early and the amount is only ~13% of the total 100k ETH, even though “only ~13%” in this case is still over $26.8 million (at $2100 per ETH). It is clear that if the 100k ETH had come from a single entity, they were more discreet than a straight 100k YOLO deposit from one address.
A deeper analysis was required, so we downloaded the transactions to the deposit contract from Etherscan for June 22, 2021 and uploaded them into Excel. The data was clear.
From the data pulled for June 22, 2021, there were 1163 addresses that deposited a total of 32 ETH into the deposit contract, 133 addresses that deposited 800 ETH into the deposit contract, and 11 other addresses that deposited other various multiples of 32 ETH.
For those unfamiliar, ETH 2.0 is the protocol change Ethereum has been planning since launch that will transition Ethereum from a proof of work to a proof of stake network. Proof of stake validators will secure the network and receive ETH for doing so. One validator starts off as 32 ETH and is currently acquired by sending 32 ETH to a deposit contract on Ethereum mainnet, the current proof of work chain.
Depositing is a one way bridge since the full amount of ETH including any interest earned is not accessible until the network merge, which is currently unlikely to happen until late 2022.
With the same total deposit amount of 800 ETH on the same day from 133 addresses, our confidence grew that the 100k ETH had in fact come from a single address. To confirm this, there had to be some similarity between the addresses. Sure enough, a quick look revealed that each address was funded by a common address.
Eureka! A whale sighting.
The picture of our whale was starting to become more clear. Let’s take a high level look at how they executed their operation:
In each of the new addresses, 800 ETH was deposited into the deposit contract – 25 deposits of 32 ETH. The remaining 10 ETH was sent to cover gas costs and once the deposits had finished the leftover ~9.86 ETH in each address was sent to a common address. These funds were eventually sent to the deposit contract.
They laid the foundation for their plan with a casual 100k ETH transaction ($210 million at $2100 per ETH) on June 16th. In a juxtaposition for such a large amount, the transaction was in no rush to go through, taking 1 minute and 41 seconds to confirm. The ‘somewhere between standard and fast’ gas price channels some serious, “Well, I don’t want to over pay for this transaction” vibes that, while understandable for most plankton using Ethereum, is more surprising coming from such a behemoth of a whale.
Using the 100k ETH in the new wallet they funded 133 fresh wallets over an 8-minute span, each with 810 ETH for a total of 107,730 ETH.
Looking at the address that was funded with the 100k ETH, they have seen over 258k ETH ($541.8 million at 2100 per ETH) flow through it according to Nansen. Without clicking through to every address, it appears that all of the ETH flowing through this address has been funnelled into the deposit contract in a similar manner to what is described above – starting with a 90,000 ETH transaction on May 21st and a 49,990 ETH transaction on June 14th.
The address is also showing no signs of slowing down. While writing this piece, the address was funded twice more for 6119 ETH and 792 ETH. Based on their seeming Michael Saylor “sell the office furniture” mentality, this is almost surely destined for the deposit contract.
Looking at the 100k ETH transaction, it was funded from an OG Ethereum address who had immediately received the funds before that from an address that Nansen shows as having received 100% of its 302k ETH from a wallet Nansen has tagged as crypto-lender Celsius.
The OG address in question has transactions going back to September 2016 and looking at their early ERC-20 transactions is a trip down r/ethtrader memory lane including SPANK, KIN, FUN, OMG (airdropped – still haven’t sold 💎🙌) and lots of SAI. They also receive regular deposits of BOND from a contract that Nansen has labeled as vesting indicating they are an early team member or investor.
Their total activity according to Nansen is massive, seeing 1.72 million ETH flow in and out. There are only so many OGs with this kind of cash and conviction in Ethereum, and it doesn’t look like they’re going anywhere anytime soon.
