The US government is active on the blockchain again, moving around $606,000 worth of Bitcoin Go to Coinbase Prime.
These aren’t just any coins. According to data tracked by Arkham, on-chain data shows that the 8 BTC transferred are related to Ilya Lichtenstein, the man behind the decade-long hack of OG exchange Bitfinex.
Moves to exchanges are often interpreted as a sign of underlying selling pressure. However, this is not always the case and may reflect day-to-day wallet movements, escrow changes, or other non-sales activity.
These coins have a purpose
The Bitcoin associated with the Bitfinex hack (Lichtenstein took away 119,756 BTC) had a court-specified destination, and it was not the U.S. Treasury Department.
In early 2025, federal proceedings solidified the physical return of seized assets to Bitfinex, requiring the government to return the tokens rather than liquidate them independently.
Bitfinex intends to use the returned funds to fully redeem all outstanding recovery rights tokens (digital claims issued to customers who suffered losses in the hack) and to use at least 80% of the remaining net proceeds to buy back and destroy its UNUS SED LEO tokens.
2016 hacker attacks
In August 2016, Lichtenstein hacked into Bitfinex and fraudulently authorized more than 2,000 transactions, transferring 119,756 BTC to wallets he controlled. At the time, the vulnerability was valued at approximately $72 million. (As of today, it is worth $8.9 billion)
In the years that followed, a sophisticated money laundering operation was carried out through cryptocurrency mixers, the dark web, chain hopping between coins, and the purchase of gold.
Finally, in 2022, investigators captured and seized some of the stolen BTC, which was worth $3.6 billion at the time. In 2024, Lichtenstein was sentenced to 60 months in federal prison and was released in January 2026 under the First Step Act, thanking President Donald Trump on X.
However, the stolen coins remain in government custody. The United States said last year that its holdings of seized bitcoins would form part of the national strategic bitcoin reserve. As of this writing, government holdings of Bitcoin are worth approximately $24.54 billion and Ethereum is worth approximately $146 million, along with several other cryptocurrencies.
