A wallet that blockchain trackers label as US government-controlled, holding bitcoin recovered from the Bitfinex hack, sent 12,267 coins to fresh addresses at 13:33 UTC on 8 October and emptied itself in a single transaction. The coins were worth about $1.01B at the price that afternoon, and the address had held them untouched since February 2024.
Bitfinex, a crypto exchange run from Hong Kong, lost 119,754 bitcoin to an intruder in August 2016 and cut customer balances by 36% to absorb the loss. American investigators recovered 94,643 of those coins in February 2022 after decrypting a file of addresses and private keys, and arrested Ilya Lichtenstein and his wife Heather Morgan.
Not The Coins Owed To Bitfinex
The wallet holding those 94,643 bitcoin has never spent anything at all, and the coins that left on 8 October came out of a different address. Whatever drove the transfer, the tranche earmarked for the exchange has not moved.
Prosecutors asked a court in January 2025 to approve returning those coins to Bitfinex as restitution paid in the asset itself rather than in cash, along with tokens created when the Bitcoin network later split. Judge Colleen Kollar-Kotelly of the federal district court in Washington sought clarification later that month, saying the return "would appear to have the effect of reducing the amount of the forfeiture order", the order that transfers seized property to the government. Other courts, she noted, had suggested that was improper.
Bitfinex told its token holders it would spend about 80% of the coins, if they ever arrive, buying back and destroying two instruments it issued after the hack. One is the Recovery Right Token handed to affected customers, the other its UNUS SED LEO exchange token. The government's own filing cut against that by arguing that "there is no 'victim' for the specific offenses of conviction in this proceeding".
Reporting in February 2026 described the coins as effectively immobilised while customers press individual claims and Bitfinex argues it bore the loss itself. No ruling has been publicly confirmed since, and the balance in the wallet has not changed.
Arkham, a blockchain analytics firm, traced a separate recovery of 12,267 bitcoin in research it published in September 2026, matching the amount that moved. That points to the laundered portion of the theft, recovered through a different route, rather than to the coins at the centre of the restitution case.
Where The Bitcoin Went
Eleven minutes after the first hop, a transaction with 43 inputs consolidated the coins and moved them onward through single-use deposit addresses, in blocks of 3,000 bitcoin and a remainder. A small test payment of 0.0012 bitcoin went ahead of each block, which is how large holders usually check an address before committing a transfer to it.
Those deposit addresses emptied into a wallet that has taken in more than 26M bitcoin across nearly 119,000 transactions. That is more coins than will ever exist, because the same bitcoin pass through a busy wallet repeatedly, and the scale of it marks the destination as an exchange or a custodian. Third-party trackers attribute the wallet to Coinbase on the strength of a 2022 label and its activity since, and neither Coinbase nor any US agency has confirmed that.
Coinbase Prime, the exchange's institutional arm, holds the US Marshals Service contract for custody of seized crypto, a $32.5M award made in 2024 that covers both safekeeping and trading. Because the contract covers both, a deposit there does not by itself indicate a sale, and funds can sit in it indefinitely.
Galaxy Research counted 9,261 bitcoin, worth about $770M, leaving identified government wallets on 6 and 7 October, and ranked 7 October as the ninth-biggest single day of outflows from those wallets since 2013. Published accounts of 7 October alone range from $334M to $566M, depending on which assets each outlet included.
The Reserve And Its Exceptions
President Trump's executive order of 6 March 2025 created a Strategic Bitcoin Reserve and stated that bitcoin deposited into it "shall not be sold". The same order carves out disposals under court order, disposals required by law, and returns to "identifiable and verifiable victims of crime", which is the exception prosecutors invoked when they asked to send the 94,643 coins back.
Arkham put the government's holdings at 306,795 bitcoin worth roughly $25B, Galaxy Research counted 319,086, and BitcoinTreasuries recorded 328,372 in late September. No audited Treasury statement of the reserve's balance has been published, and confirmed purchases on the open market stand at zero.
Treasury Secretary Scott Bessent told the World Economic Forum in January 2026 that "this administration's policy is to add seized Bitcoin to our digital asset reserve". Earlier administrations went the other way, disposing of roughly 195,000 bitcoin between 2014 and 2023, including 9,861 coins from the Silk Road case for about $215M in March 2023.
The Marshals Service moved 57.55 bitcoin forfeited in the Samourai Wallet case to a Coinbase Prime address in November 2025, and the balance later showed zero. Asked about it, the agency told DL News it "has not sold the Bitcoin mentioned", so a Coinbase Prime deposit has already preceded an unexplained disappearance once.
The Hack And The Sentences
Lichtenstein pleaded guilty in August 2023 to conspiracy to commit money laundering and drew 60 months in prison in November 2024, with three years of supervised release to follow. Morgan, who performed as a rapper under the name Razzlekhan, received 18 months four days later.
More than 2,000 transactions carried the coins out of Bitfinex, and Lichtenstein kept laundering the proceeds for five and a half years until the arrests. Investigators found the keys to most of the haul in an encrypted file stored in a cloud account.
Officials put the value of the seized bitcoin at around $3.6B when they announced it in 2022, and the total recovered across all the assets in the case at roughly $10B. Bitcoin has roughly doubled in price since, which is why the same tranche is now discussed in larger figures. Corporate holders have gone in the other direction, among them Sequans, a French designer of cellular chips, which sold its bitcoin treasury this year to fund a return to chip development.
No Word From Washington
Neither the Justice Department nor the Marshals Service answered press questions about the movement, and no statement has come from Treasury, Coinbase or Bitfinex. Reporters recorded no response at all rather than a refusal to comment.
Tracing stops where the coins entered a shared wallet, because everything inside one is mixed together, so no public record shows whether any of them have been sold. The restitution case that would explain a sale is still unresolved.
