The US government conducted a series of Bitcoin transfers on February 29th, which attracted market attention. The US Department of Justice confirmed that these transactions were for “law enforcement purposes”.
(Background information:
The US government sold 15,000 BTC at a high point? Seized Bitcoin’s value soared to $12 billion
)
(Additional background:
The US government seizes 8,100 Bitcoins, the second-largest BTC holding after Satoshi Nakamoto!
)
Table of Contents
US government transfers seized funds from the Bitfinex hack
US sells 12,719 BTC within a year
Will it cause dramatic market fluctuations?
The US government transferred over 15,000 BTC worth nearly $1 billion on February 29th, causing market attention. According to the update released by CoinDesk early today, the US Department of Justice has confirmed that these transactions were for “legitimate law enforcement purposes”.
Although the officials did not explain the purpose, it can be speculated that it is likely to prepare for an auction. Therefore, the BTC was transferred to a new cold wallet to facilitate the delivery to the winning bidder after the auction ends.
According to the data from the cryptocurrency intelligence platform Arkham, the US government wallets involved in the transfers were labeled as “Bitfinex Hacker Seized Funds”, indicating that these Bitcoins were seized by the US government from the Bitfinex exchange hack.
In August 2016, Russian entrepreneur Ilya Lichtenstein and his rapper wife Heather Morgan stole up to 119,756 Bitcoins from the Bitfinex exchange. Several years later, in February 2022, both of them were arrested by the US Department of Justice, and 94,643 Bitcoins were confiscated.
Further reading:
The Truth about the Theft of 120,000 Bitcoins: New York Money Laundering Couple Admits to Attacking Bitfinex Hackers
US sells 12,719 BTC within a year
In addition to the Bitcoins seized from the Bitfinex hack, the US government also seized 69,369 BTC from the largest darknet marketplace Silk Road in November 2020, and 51,326 BTC from Silk Road hacker James Zhong in March 2022. Currently, these BTC are mainly stored in encrypted, password-protected offline cold wallets controlled by the US Department of Justice, the Internal Revenue Service, or other institutions.
The US government’s recent actions of selling Bitcoin include selling 9,861 BTC on Coinbase in February last year, and selling 2,858 BTC in late January this year, totaling 12,719 BTC.
Previously, the US Marshals Service stated that the official will sell cryptocurrency assets in batches, rather than all at once, to minimize adverse effects on the market. Jarod Koopman, the executive director of the Cybercrime and Forensic Services Division of the IRS, also stated that:
According to Arkham’s data, the current BTC holdings of the US government still amount to as much as 215,000 BTC, with a total value of $13.24 billion, making it the world’s third-largest Bitcoin whale.
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