US government moves $470 million in seized crypto to Coinbase wallets, raising Bitcoin sale questions
The US government moved about $470 million in seized crypto to probably Coinbase Prime addresses, in accordance to Arkham, reviving questions over potential asset gross sales.
On Oct. 7, blockchain analytics agency Arkham Intelligence said the transfers included Bitcoin, wrapped Bitcoin and USDT.
Arkham linked the transferred belongings to seizures involving the 2016 Bitfinex hack and Alameda Research, the buying and selling agency beforehand managed by FTX founder Sam Bankman-Fried.
While we clearly cannot say the Bitcoin is being bought, it’s one believable end result. It’s most likely simply as probably they’re performing inside pockets hygiene or administrative work.
Still, the vacation spot places the transaction underneath better scrutiny after the Trump administration pledged to retain Bitcoin positioned in the US Strategic Bitcoin Reserve and federal officers earlier this 12 months rejected claims that seized cash had been quietly bought.
A earlier sale declare ended in a government denial
The newest motion lands 9 months after the US Marshals Service pushed again in opposition to experiences that Washington had disposed of Bitcoin surrendered in the Samourai Wallet prison case.
Bitcoin Magazine reported in January that roughly $6.3 million of Bitcoin paid to the Justice Department as a part of responsible pleas appeared to have been bought. Sen. Cynthia Lummis, one in every of Congress’ most outstanding Bitcoin advocates, responded by questioning why the government would liquidate the asset after President Donald Trump had directed officers to protect Bitcoin for the nationwide reserve.
But the Marshals Service told DL News it had not bought these BTC, whereas including that its crypto liquidations cross by means of a multi-level approval course of earlier than forfeited belongings may be disposed of.
The situation turned extra delicate after Trump established the Strategic Bitcoin Reserve in March 2025. His executive order mentioned Bitcoin deposited into the reserve “shall not be bought” and will as an alternative be maintained as a US reserve asset.
The White House argued at the time that untimely government Bitcoin gross sales had already value taxpayers greater than $17 billion in foregone worth.
Seized Bitcoin doesn’t routinely imply reserve Bitcoin
The coverage, nonetheless, leaves room for some government-controlled crypto to transfer out of federal fingers.
Trump’s order permits digital belongings to be disposed of when required by a court docket or regulation, and when officers decide that belongings or their proceeds ought to be returned to verified crime victims, used for law-enforcement functions or utilized towards different statutory forfeiture obligations.
That distinction may very well be notably essential for these newest transfers.
The government seized about 95,000 Bitcoin in 2022 from wallets managed by Ilya Lichtenstein and Heather Morgan as a part of the investigation into the Bitfinex hack. Lichtenstein later admitted to hacking the change, the place about 119,754 Bitcoin have been stolen in 2016. Authorities subsequently seized one other roughly $475 million in belongings tied to the theft.
Those belongings have confronted competing forfeiture and restitution claims, so their authorized therapy could differ from Bitcoin already transferred into the Strategic Bitcoin Reserve.
The FTX collapse additionally led to prison forfeiture proceedings. The choose in Bankman-Fried’s case authorized recovered forfeiture funds to compensate victims, including one other potential victim-repayment dimension to the most recent actions.
That makes Wednesday’s transaction a check of how a lot may be inferred from government wallets alone.
A confirmed sale of Bitcoin deposited into the Strategic Bitcoin Reserve, exterior the order’s exceptions, would reopen questions over whether or not federal companies are following the administration’s accumulation coverage. A switch made for custody, restitution or one other permitted forfeiture objective would fall into a special class.
For now, Arkham experiences tons of of thousands and thousands of {dollars} leaving US government wallets for probably Coinbase Prime deposit addresses. Whether these belongings stay there, transfer into new custody preparations, or are transformed into {dollars} will decide whether or not the transaction turns into one other false alarm over government Bitcoin gross sales or the primary signal of a major new disposal.
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