US government moves another $1 billion in Bitcoin as BTC slides $4,000
US government-linked wallets moved over $1 billion in Bitcoin on Oct. 8 as BTC costs fell and extra cash reached Coinbase Prime.
On Oct. 8, Galaxy Research flagged the switch of 12,267 BTC, valued at roughly $1 billion, from a government-controlled address holding belongings recovered from the 2016 Bitfinex hack.
The Bitcoin initially moved to an unidentified intermediary wallet earlier than blockchain analyst EmberCN reported that 9,000 BTC, price about $739 million, had reached Coinbase Prime, Coinbase’s institutional buying and selling and custody platform.
The transactions prolonged three consecutive days of government-linked Bitcoin actions, coinciding with a roughly $4,000 decline in the cryptocurrency’s worth. During the interval, Bitcoin’s price fell from about $86,500 when the transfers started late on Oct. 6 to round $82,500 on Thursday, based on EmberCN.
Meanwhile, the timing has renewed considerations about potential government promoting.
However, transfers to Coinbase Prime don’t show the Bitcoin was liquidated or that the transactions contributed to the worth decline. The platform gives custody and buying and selling companies, permitting belongings to be deposited with out an instantaneous sale.
Government transfers expose beforehand unidentified Bitcoin holdings
The Oct. 8 motion adopted substantial transfers that Galaxy Research had documented over the previous two days.
On Oct. 7, the agency reported that government-linked wallets despatched roughly 8,428 BTC to Coinbase Prime, following another 834 BTC the day past. Together, these transactions concerned about 9,261 BTC, valued at roughly $770 million.
Nearly half of these belongings originated from Bitcoin recovered following the Bitfinex hack, whereas another portion was linked to beforehand recognized cryptocurrency seizures involving Binance.
However, Galaxy’s evaluation additionally recognized 2,456 BTC originating from wallets not beforehand categorised as government holdings.
The researchers attributed these belongings to US authorities as a result of they adopted the identical switch procedures as identified government wallets and reached an recognized federal Coinbase Prime deposit deal with.
The discovery means that publicly labeled government wallets might understate how a lot Bitcoin Washington controls.
Galaxy stated the Coinbase Prime deposit deal with had acquired roughly 11,567 BTC since its first recorded use in December 2025. About 6,406 BTC got here from recognized government wallets, whereas another 5,160 BTC originated from beforehand unlabeled addresses.
The agency additionally categorised the Oct. 7 exercise as the ninth-largest single-day Bitcoin outflow from recognized US government wallets since 2013, excluding inner transfers, and the most important since Dec. 2, 2024.
Galaxy estimated that government-attributed wallets held roughly 319,086 BTC in its earlier evaluation, down from a peak of 352,587 BTC in August 2024.
The newest actions add to a sequence of transactions which have raised questions on Washington’s cryptocurrency administration practices.
As CryptoSlate previously reported, government-linked wallets had already moved about $470 million in seized digital belongings to probably Coinbase Prime addresses, together with funds tied to the Bitfinex hack and Alameda Research.
Bitfinex possession dispute complicates Bitcoin reserve coverage
The origin of the newest Bitcoin transfers provides another complication: a few of Washington’s largest cryptocurrency holdings stay tied to authorized proceedings that would in the end decide whether or not the government retains them.
Galaxy recognized two notably vital asset teams in its estimate of the government’s holdings.
The first consists of roughly 94,643 BTC held in a principal pockets containing belongings recovered from the Bitfinex hack. The second entails roughly 127,271 BTC related to LuBian and Cambodian businessman Chen Zhi.
The Justice Department filed a civil forfeiture criticism in October 2025 looking for to completely confiscate Bitcoin allegedly linked to cryptocurrency fraud and cash laundering.
Together, the 2 teams characterize greater than 66% of the government’s beforehand estimated holdings, though their authorized standing differs from Bitcoin definitively out there for federal reserve functions.
The Bitfinex recovery has confronted competing possession claims.
Federal prosecutors initially proposed returning recovered Bitcoin to the change by in-kind restitution. However, an April 2025 federal courtroom ruling awarded Bitfinex no direct restitution in the prison proceedings and directed competing claims over the forfeited belongings right into a separate ancillary continuing.
Some former Bitfinex clients have asserted possession claims towards parts of the recovered cryptocurrency, difficult the change’s entitlement to the total quantity.
Galaxy stated the principal Bitfinex restoration pockets, which holds about 94,643 BTC, remained untouched as of its evaluation, leaving the newest motion involving another restoration deal with to be evaluated individually.
The dispute carries implications for President Donald Trump’s Strategic Bitcoin Reserve.
Under the March 2025 government order, Bitcoin lastly forfeited to the government and assembly specified eligibility necessities could be transferred into the reserve, the place it typically can’t be offered.
The order nonetheless permits sure disposals required by courts or legislation, together with transfers involving verified crime victims and different specified forfeiture obligations.
That distinction means a government-controlled Bitcoin pockets shouldn’t be robotically handled as a part of the Strategic Bitcoin Reserve.
A confirmed sale of qualifying reserve belongings outdoors the order’s permitted exceptions would increase questions on compliance with the administration’s coverage. Transfers made to fulfill official restitution or forfeiture obligations would carry completely different authorized implications.
For the recovered Bitfinex belongings, possession proceedings may decide whether or not profitable claimants obtain substantial portions of Bitcoin or the government retains them.
Meanwhile, the place the remaining 3,267 BTC from Thursday’s reported motion go, and the way the government treats belongings already deposited at Coinbase Prime, may present additional proof of Washington’s speedy intentions.
Any subsequent disposal would additionally renew scrutiny of how federal businesses classify recovered Bitcoin, notably when belongings held in government wallets stay topic to competing claims moderately than being out there for everlasting retention in the reserve.
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