US government moves $1 billion in Bitcoin from Bitfinex hack seizure

On October 8, 2026, U.S. government-linked wallets transferred 12,267 Bitcoin, worth $1.01 billion, from a Bitfinex hack seizure address to unlabeled wallets. This movement, alongside deposits of over $1 billion in Bitcoin and USDT to Coinbase Prime, coincided with a $4,000 drop in Bitcoin's price to $82,500. While the transfers spark liquidation fears, they may represent custody management under a March 2025 executive order establishing a Strategic Bitcoin Reserve.

Bitfinex recovery wallets

• ▪On October 8, 2026, U.S. government-linked wallets transferred 12,267 Bitcoin, valued at approximately $1.01 billion, from 2016 Bitfinex hack seizure assets to new, unlabeled addresses, with no recorded deposits to cryptocurrency exchanges
• ▪The principal Bitfinex recovery wallet holding approximately 94,643 Bitcoin remained untouched as of Galaxy Research's October 2026 assessment

Government deposits to Coinbase Prime

• ▪The October 7, 2026, Coinbase Prime deposits totaling about 3,200 BTC and $119 million USDT originated from wallets tied to the FTX/Alameda Research and Bitfinex hack seizures, according to Arkham data
• ▪U.S. government-linked wallets deposited approximately 3,200 Bitcoin, valued at $264 million, and $119 million in USDT to Coinbase Prime on October 7, 2026
• ▪U.S. government-linked wallets deposited approximately 9,000 Bitcoin, worth about $739 million, to Coinbase Prime on October 8, 2026, according to blockchain analyst EmberCN

Coinbase Prime deposits

• ▪In July 2026, the U.S. government routed approximately $288 million in seized Bitcoin and Ether to Coinbase Prime through new intermediary wallets
• ▪The U.S. government's Coinbase Prime deposit address has received approximately 11,567 Bitcoin since December 2025, with 5,160 Bitcoin originating from previously unlabeled addresses

The Bitfinex hack

• ▪The Bitfinex hack seizure assets originate from approximately 94,000 Bitcoin seized by the U.S. government in 2022 from Ilya Lichtenstein and Heather Morgan
• ▪A total of 119,754 Bitcoin was stolen from the Bitfinex exchange during the 2016 hack

Bitfinex ownership claims

• ▪An April 2025 federal court ruling denied Bitfinex direct restitution in criminal proceedings, directing competing ownership claims over the Bitcoin seized in the 2016 Bitfinex hack case into separate ancillary proceedings
• ▪Some former Bitfinex customers have asserted ownership claims against portions of the cryptocurrency recovered from the 2016 Bitfinex hack, challenging the exchange's entitlement to the full amount

Government Bitcoin holdings

• ▪A March 2025 executive order signed by President Donald Trump established a Strategic Bitcoin Reserve, directing that eligible forfeited Bitcoin be held long-term and generally not sold
• ▪Galaxy Research identified 2,456 Bitcoin originating from previously unlabeled wallets that followed federal transfer procedures, suggesting official U.S. government holdings may be understated
• ▪Galaxy Research estimated that U.S. government-attributed wallets held approximately 319,086 Bitcoin, down from a peak of 352,587 Bitcoin in August 2024

Debatable claims

• ▪Former customers have a stronger claim to the seized Bitcoin than the Bitfinex exchange
• ▪Unlabeled government wallets undermine cryptocurrency market transparency
• ▪US government cryptocurrency transfers cause harmful market volatility
• ▪The US government should prioritize victim restitution over building a Strategic Bitcoin Reserve