Gov Wallets Do the Two-Step: $103M Today, $1B Bitcoin Cha-Cha Tomorrow 🪩

Wallets linked to the U.S. government moved roughly $103 million in seized crypto on October 7, 2026, sending 833.6 BTC (about $71.56 million) to Coinbase Prime and 40,285 BNB (about $31.63 million) through an unlabeled address to a second unlabeled address, according to on-chain data from Lookonchain citing EmberCN and Arkham. The Bitcoin tranche split between roughly 568.7 BTC tied to the Potapenko/Turogin forfeiture case and 264.9 BTC traced to the Bitfinex hack seizures, with both batches routed through intermediary addresses before reaching Coinbase Prime deposit addresses within hours. The 40,285 BNB was traced by Arkham to funds seized from Alameda Research, the trading firm tied to the collapsed FTX exchange. No Treasury or Department of Justice statement has confirmed the purpose of the moves.

The activity continued the following day. On Wednesday, government-linked wallets transferred about 9,261 BTC worth roughly $770 million to Coinbase Prime over two days, with half recovered from the Bitfinex hackers and another portion stemming from known Binance seizures, according to Galaxy Research. An additional 2,456 BTC originated from previously unknown holdings and was sent to a seizure address on Coinbase Prime, which Galaxy said may represent new law enforcement seizures. Separately, Arkham data showed roughly $119 million in USDT and about 2,574 BTC (roughly $215 million) routed through intermediary addresses to Coinbase Prime that same day.

The moves escalated Thursday when a wallet Arkham labels as holding funds seized from 2016 Bitfinex hacker Ilya Lichtenstein sent 12,267 BTC, worth about $1.01 billion, in a single transaction at 9:33 a.m. ET. Nearly all of it landed at a new, unlabeled address, while 0.0012 BTC went to a second wallet. Arkham's data marks both outputs as already spent. The government seized roughly 94,000 BTC in 2022 from Lichtenstein and Heather "Razzlekhan" Morgan; in January 2025, the Justice Department argued that 94,643 BTC should be returned to Bitfinex. The U.S. Marshals Service has used Coinbase Prime as its custody provider for seized assets since 2024.

Coinbase Prime offers both trading and custody, meaning a deposit does not confirm a sale. Similar moves in July included $288 million and $297 million in seized crypto routed to Coinbase Prime. President Donald Trump's March 2025 executive order established a Strategic Bitcoin Reserve of forfeited Bitcoin that "shall not be sold," with Bitcoin counting only once finally forfeited; a separate Digital Asset Stockpile covers other tokens like BNB. The government still holds an estimated 306,795 BTC, worth roughly $24.85 billion with BTC trading near $81,000, according to Arkham. Cointelegraph and Decrypt both reported reaching out to the U.S. Marshals Service and the Department of Justice for comment on the transfers but did not receive an immediate response.