The US government is once again active on the blockchain, moving around $606,000 worth of bitcoins. at Coinbase Prime.
These are not just any coins. On-chain data suggests that the 8 BTC transferred are linked to Ilya Lichtenstein, the man behind the decade-old hack of the OG exchange Bitfinex, according to data tracked by Arkham.
Transfers to stock exchanges are often interpreted as a sign of potential selling pressure. However, this is not always the case and may also reflect routine portfolio movements, custody changes, or other non-sale activities.
These pieces have a purpose
The bitcoin linked to the Bitfinex hack, which allowed Lichtenstein to walk away with 119,756 BTC, has a court-mandated destination and it’s not the US Treasury.
In early 2025, a federal proceeding solidified the in-kind restitution of assets seized from Bitfinex, requiring the government to return the coins rather than liquidate them independently.
Bitfinex intends to use the returned funds to fully repurchase all outstanding recovery rights tokens – digital claims issued to customers who suffered losses during the hack – and to allocate at least 80% of the remaining net proceeds to repurchase and burn its UNUS SED LEO token.
The 2016 hack
In August 2016, Lichtenstein hacked Bitfinex and fraudulently authorized over 2,000 transactions, transferring 119,756 BTC to a wallet under his control. At the time, the feat was worth around $72 million. (As of today, it would be worth $8.9 billion)
What followed were years of sophisticated money laundering via crypto mixers, darknets, and chain hopping between coins, as well as the purchase of gold.
Eventually, in 2022, investigators caught up and seized some of the stolen BTC, then worth $3.6 billion. 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 for X.
The stolen coins, however, remained in government custody. The United States said last year that its seized BTC holdings would be part of a national strategic Bitcoin reserve. At the time of writing, the government holds bitcoin valued at approximately $24.54 billion, ether at approximately $146 million, and several other cryptocurrencies.
