US Government Moves $1 Billion in Seized Bitcoin — and It Isn't a Sale

A US government-linked wallet just moved 12,267 BTC in a single transaction — about $1.01 billion, per Arkham data. Nearly all of it landed at a brand-new, unlabeled address, while a token 0.0012 BTC went to a second wallet.

What actually moved

The coins trace back to the 2016 Bitfinex hack, in which attackers stole 119,756 BTC. The government seized roughly 94,000 BTC in 2022 from Ilya Lichtenstein, who orchestrated that hack, and his wife Heather Morgan. This week's transfer is part of that older stash, not a fresh seizure.

It also wasn't a one-off. Hours earlier, government-linked wallets sent about $119 million in USDT and roughly 2,574 BTC to Coinbase Prime. Those flows followed a wider set of transfers worth $770 million, half recovered from the Bitfinex hackers and part tied to Binance seizures.

Custody is not a sale

Here is the part the headlines skip: Coinbase Prime has been the custody provider the US Marshals Service uses for seized assets since 2024. Because it holds coins as well as trades them, a deposit there does not prove a sale.

Selling would also cut against stated policy. A March 2025 executive order directed forfeited Bitcoin into a Strategic Bitcoin Reserve that is not meant to be sold.

Why traders should care

The government still holds roughly 306,795 BTC, worth about $24.85 billion, according to Arkham. One estimate puts its total holdings at 328,372 BTC. That is a supply overhang the market watches closely, and every wallet move reignites liquidation talk.

There is a real gap between "coins moved" and "coins sold" — earlier transfers in July routed hundreds of millions of dollars to the same custody address. For anyone holding BTC or farming airdrops, the takeaway is simple: check the destination, not the headline.