The US government transferred about $470 million in seized cryptocurrency to addresses likely linked to Coinbase Prime, according to blockchain analytics firm Arkham Intelligence. The October 7 transfer included Bitcoin, wrapped Bitcoin, and USDT.
Arkham traced the transferred assets to seizures related to the 2016 Bitfinex hack and Alameda Research, the trading firm previously controlled by FTX founder Sam Bankman-Fried. The movement has renewed scrutiny over potential government crypto sales and compliance with federal asset policies.
Questions About Intent
The destination of the transfer raises questions about the government's intentions. Possible explanations include asset sales, internal wallet management, or administrative procedures. The transaction's significance depends on whether the assets remain in custody, are transferred elsewhere, or are converted to dollars.
Context: The Strategic Bitcoin Reserve
In March 2025, President Trump established the Strategic Bitcoin Reserve through executive order, directing that Bitcoin deposited into the reserve "shall not be sold" and should be maintained as a US reserve asset. The White House stated that premature government Bitcoin sales had cost taxpayers more than $17 billion in foregone value.
The order permits digital assets to be disposed of when required by court order or law, when proceeds should be returned to verified crime victims, used for law-enforcement purposes, or applied to statutory forfeiture obligations.
Previous Denial of Secret Sales
Nine months earlier, the US Marshals Service denied reports that the government had sold Bitcoin from the Samourai Wallet criminal case. Bitcoin Magazine had reported in January that roughly $6.3 million in Bitcoin paid to the Justice Department appeared to have been sold. The Marshals Service confirmed it had not sold those assets and noted that crypto liquidations require multi-level approval before disposal.
Competing Claims on Seized Assets
The seized assets involved in the latest transfer face competing legal claims. The government seized approximately 95,000 Bitcoin in 2022 from wallets controlled by Ilya Lichtenstein and Heather Morgan related to the Bitfinex hack investigation. Authorities also seized roughly $475 million in additional assets tied to the theft.
These assets have faced competing forfeiture and restitution claims that may affect their legal treatment differently from Bitcoin already in the Strategic Bitcoin Reserve. Additionally, FTX-related criminal forfeiture proceedings authorized recovered funds to compensate victims, adding another potential dimension to asset movements.
Whether the latest transfer represents a policy violation or a permissible forfeiture action remains unclear pending further developments.
