With the recent surge in Bitcoin prices, the on-chain data intelligence platform Arkham has also tracked the large-scale transfer of Bitcoin seized in the Bitfinex hack by the US government, totaling 15,000 BTC.
(Bitcoin Market Crash! It briefly fell below $59,000, plummeted 8%, and liquidated over $700 million from 180,000 people.)
(Bitcoin broke through $64,000, but don’t celebrate yet. Matrixport founder warns of vulnerability in March, and expects a 15% pullback after Bitcoin’s halving.)
Bitfinex, a well-established cryptocurrency exchange, experienced one of the largest hacking events in history in August 2016 when hackers stole up to 119,756 bitcoins (valued at approximately $71 million at the time). With the recent strong upward trend in Bitcoin, at the current price of $61,224, the value of these bitcoins has increased more than 103 times, reaching $7.3 billion.
In February 2022, the US Department of Justice captured Ilya Lichtenstein, a Russian-American entrepreneur, and his 33-year-old rapper wife, Heather Morgan, who were suspected of laundering nearly 120,000 bitcoins from the Bitfinex hack. They successfully seized 94,000 bitcoins, bringing the case to a close.
(Truth behind the theft of 120,000 bitcoins: New York money laundering couple admits to attacking Bitfinex hackers.)
Is the US government transferring BTC to crash the market?
It is worth mentioning that in the early hours of today, after the Bitcoin price surged past $64,000, a wallet containing funds seized by the US government transferred 1 bitcoin (BTC) at around 1:39 PM Eastern Time. Less than half an hour later, the remaining 2,817 BTC in the wallet was also transferred, with the total value of these transfers being approximately $173 million.
Subsequently, another wallet containing about 12,300 BTC first transferred 0.01 BTC to an unknown address, followed by the transfer of the remaining bitcoins. The value of these transactions is approximately $750 million. In the end, the total value of bitcoins transferred from these two wallets is approximately $923 million.
The US government transfers BTC
The US government is one of the world’s largest Bitcoin whales, second only to Satoshi Nakamoto and the Binance cold wallet marked as an exchange, according to data from the cryptocurrency intelligence platform Arkham. The US government currently holds 200,000 bitcoins, with a total value of up to $12.2 billion.
According to rankings by bitinfocharts data, the US government’s holdings are only surpassed by the 1.1 million bitcoins held in addresses associated with Satoshi Nakamoto (approximately 22,000 addresses holding about 1.1 million BTC, but have not been moved for a long time) and the 248,600 bitcoins in the Binance cold wallet (which likely belong to customers).
Where does this massive amount of bitcoins come from? According to on-chain data tool Dune, in the period from November 2020 to February 2022, the US government seized over 200,000 bitcoins from cybercriminals and dark web markets in three separate operations. Currently, these BTC are mainly stored in encrypted, password-protected offline cold wallets controlled by the US Department of Justice, IRS, or other institutions.
The specific details of the sources are as follows:
November 2020 – Silk Road seizure: 69,369 BTC
January 2022 – Bitfinex hacker seizure: 94,643 BTC
March 2022 – Seizure from Silk Road hacker James Zhong: 51,326 BTC, with the US government still holding 41.5K BTC from this part.
Related reports
Bitfinex hacker case to be heard in Washington: “Money laundering couple” wife granted $3 million bail, husband remains detained.
SlowMist Analysis: US Department of Justice cracks the 2016 Bitfinex hacking case, analyzing key points of the investigation.
Bitfinex $4.5 billion theft: “Money laundering couple” transferred to Washington, preparing for $8 million bail.