Key Insights:
- The U.S. government’s recent transfer of Ethereum to Coinbase has sparked speculation about a larger sell-off.
- Transfers to platforms like Coinbase Prime often come before massive sell offs, historically speaking.
- Most of this ETH originated from assets seized in 2022 from an online scammer named “Horror” (Chase Senecal).
The U.S. government has recently transferred Ethereum (ETH) to Coinbase. This move has set off a wave of speculation among crypto traders and analysts.
While the transfer was worth approximately $219,000, or only a fraction of the government’s total Ethereum holdings, the move has sparked sell-off concerns. Could this be the first step towards a much larger liquidation of seized crypto assets?
A Small Transfer With Big Implications
The transferred amount was around 86.56 ETH. This amount may seem trivial when compared to the U.S. government’s estimated $650 million Ethereum stockpile.
ARKHAM ALERT: THE US GOVERNMENT JUST DEPOSITED $200K ETH TO COINBASE
A US Government wallet just moved $200K to a Coinbase Prime Deposit, after a $10 test transaction.
This ETH was originally seized from Chase Senecal in October 2022. pic.twitter.com/CFdfN73zyD
— Arkham (@arkham) July 7, 2025
Still, the fact that the transaction occurred at all is worth paying attention to.
Analysts and traders often see these kinds of transfers to exchanges as early signals of incoming asset sales, and more could be inbound. Historically, when large institutional holders like government entities move funds onto platforms like Coinbase Prime, it usually means that they’re preparing to convert those digital assets into fiat.
Coinbase Prime, in particular, caters to clients like these: high-volume traders and institutional clients.
The Context Behind the ETH Move
So where does this Ethereum come from? Most of the Ether in the US government’s possession comes from assets seized by U.S. law enforcement in 2022.
The funds were taken from Chase Senecal, an online scammer known by the alias “Horror.”
1/ I am very happy to share the FBI seized crypto, BAYC 9658, AP watch, and Doodle 3114 from the phishing scammer known as Horror (HZ) aka Chase Senecal as a result of my thread. pic.twitter.com/H1JjOjQNuF
— ZachXBT (@zachxbt) February 3, 2023
Horror was involved in various NFT scams and hacking activities, and the government has held these seized assets for several years without any notable activity.
At least until now.
Prior to this, the only other time during Trump’s presidency that the government transferred crypto to an exchange was shortly after his inauguration. That transaction was even smaller and didn’t stir up nearly as much debate.
However, now that Trump has been in office for several months and is actively working on a proposed U.S. Crypto Reserve, this transfer could be something to be worried about.
Is the Government Planning to Sell Ethereum?
Considering the US government’s history of liquidating seized crypto assets, speculation is growing that this move could be the start of a much larger sell off.
Under the previous administration, the government sold off massive amounts of Bitcoin through exchanges. This said, similar ETH transfers could indicate more of the same.
The timing of the transfer is also worth mentioning. Ethereum’s price has recently stabilized after a six-month downtrend, and there iss no clear financial pressure for the government to sell right now.
Also, the amount moved is small, and not even the entire balance from Senecal’s confiscated stash. This leaves room for wider explanations, and some analysts believe this may have been a routine transfer or even a test transaction.
Others argue it’s a trial run for an even bigger liquidation strategy that could unfold later this year. Either way, the move shows that the US government is now looking into its crypto holdings and deciding what to do with it.
The Proposed U.S. Crypto Reserve
Another source of intrigue to the situation is President Trump’s proposed U.S. Crypto Reserve. The idea is to build a sovereign stockpile of digital assets to help stabilize the country’s future and reduce dependence on fiat.
This plan includes Bitcoin and other major altcoins, and if Ethereum is to be a part of this reserve, transferring it to an exchange for liquidation seems contradictory. Some speculate that the government may be reorganizing its holdings ahead of this policy rollout.
Still, without official communication, the reason behind the transfer remains a mystery.
Ethereum Market Reaction Has Been Calm, For Now
Despite the buzz, the Ethereum market has remained mostly unaffected by the news.
ETH is still trading near $2,530, and is showing only a marginal decline of 0.19% in the hour following the announcement.
This relatively quiet response shows that the market isn’t panicking, at least not yet. However, that doesn’t mean traders aren’t paying attention.
Crypto markets are extremely sensitive to movements from major wallet addresses, especially when linked to government entities. If the government starts to offload larger portions of Ethereum, the resulting sell-off could be devastating.
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