Government-Linked Wallets Moved About $1.5 Billion in Seized Crypto in Two Days. Washington Hasn't Said Why

U.S. government-linked wallets moved about $1.5 billion in seized cryptocurrency on Oct. 7 and 8, mostly Bitcoin, according to blockchain analytics firm Arkham. No federal agency has explained the transfers.

Bitcoin was trading around $83,200 as of today, Oct. 10, up about 1% over 24 hours, according to 24/7 Wall St. That is roughly 34% below the all-time high of $126,080 cited in the same report.

What moved

On Oct. 7, wallets tied to the government sent 833.6 BTC, about $71.6 million, to deposit addresses Arkham tags as Coinbase Prime. About 568.7 BTC of that traces to forfeited funds from HashFlare founders Sergei Potapenko and Ivan Turõgin. The other 264.9 BTC traces to the 2016 Bitfinex hack.

The same day, 40,285 BNB, worth about $31.6 million, went to an outside address. Arkham traces those coins to assets seized from Alameda Research.

On Oct. 8, a wallet holding Bitfinex-hack assets sent 12,267 BTC, about $1.01 billion, to an address whose owner has not been identified. That transfer appears in Bitcoin block 970496. Analysts quoted in the reporting say it could be an intermediary wallet ahead of another Coinbase deposit.

Lookonchain counted 17,733 BTC, worth $1.48 billion, plus 750 WBTC, worth $62 million, deposited to Coinbase Prime over three days. Bitcoin fell 6.9% in that stretch. Counts differ by tracker and by window.

A transfer is not a sale

Coinbase Prime is both a trading venue for institutions and the government's custodian. A deposit there can mean storage rather than liquidation. A $288 million move in July looked similar.

The Bitfinex coins carry another wrinkle. In January 2025, the Justice Department argued that 94,643 BTC from the hack should go back to Bitfinex. The HashFlare forfeiture came with a Justice Department statement that forfeited assets would be available to repay victims. No source ties this week's transfers to either purpose.

The government's last large sale on record was 19,800 BTC from the Silk Road haul, sent to Coinbase in December 2024 and worth about $1.92 billion. Bitcoin slid more than 2% within 24 hours.

This week's slide was sharper. Bitcoin briefly dipped to $80,400 before recovering above $82,000, and roughly $1.1 billion in leveraged positions were liquidated over 24 hours, per Odaily. Glassnode data showed thin spot and ETF volume, lower than about 90% of periods since January 2024. Government transfers were one of several pressures cited, alongside mining-pool sales and short-term holders sending coins to exchanges. Nobody has established how much each contributed.

What Washington holds

Galaxy Research puts the government's holdings at about 319,100 BTC, roughly 71% of it tied to LuBian and Bitfinex-recovered funds. EmberCN, an on-chain analyst, counts about 324,000 BTC, worth around $27.7 billion, and roughly $28 billion in total crypto. Crypto Briefing's range is 319,000 to 328,000 BTC, or $26 billion to $28 billion.

The holdings were reportedly worth about $40.7 billion at the October 2025 peak. Crypto Briefing puts the paper decline at about $16 billion. Washington sold nothing to get there.

A March 2025 executive order created the Strategic Bitcoin Reserve and halted routine liquidation of forfeited Bitcoin.

Two sets of real numbers

Critics of the reserve point to the paper drop as proof that holding a volatile asset with public money carries risk. That is taxpayer-adjacent money, and the swing was tens of billions.

Supporters point to White House crypto advisor David Sacks. He says past government sales of seized Bitcoin brought in about $366 million, and those same coins would now be worth about $17 billion. In his framing, selling early was the costly mistake.

Both figures are arithmetic on prices, and neither settles the policy question. The first is the cost of holding through a decline. The second is the cost of selling before a rise. Which one matters depends on where Bitcoin goes next.

What is still open

The Justice Department, the Treasury and the White House have not said whether any of this week's coins are headed to the market, to victims, or simply to a new custody address. The unidentified destination of the 12,267 BTC is the clearest thing to watch. If those coins land at Coinbase Prime, as the earlier tranches did, the government will again face the question of whether the Strategic Bitcoin Reserve allows any outflow at all.