Wallets controlled by the US government shifted about $103 million in seized crypto on Tuesday, October 7. The activity has traders wondering whether Washington is preparing to sell. No official statement has been issued, and the purpose of the transfers is unconfirmed.
Blockchain analytics firm Arkham Intelligence tracked two separate batches leaving government-linked addresses within roughly nine hours. The first was 833.6 BTC, worth about $71.6 million, which passed through unlabeled addresses before reaching a Coinbase Prime deposit address. The second was 40,285 BNB, the token of the Binance ecosystem, worth around $31.6 million. It went to an unlabeled wallet and was then forwarded to another.
Arkham’s tracing connects the bitcoin to two enforcement cases. Part of it comes from forfeited funds in the HashFlare fraud case, in which a crypto-mining service sold contracts without the computing power to back them. The rest comes from coins seized after the 2016 Bitfinex hack. The BNB traces back to assets taken from Alameda Research, the trading firm tied to the collapsed FTX exchange.
The Coinbase Prime destination is what caught the market’s attention. Coinbase Prime is the exchange’s institutional arm, and deposits there are often read as a prelude to selling. It also serves as the government’s custodian, so a deposit can simply mean storage. A similar $288 million transfer in July was widely seen in that light, and nothing in this week’s data settles which explanation applies.
Policy offers some context. A March 2025 executive order created a Strategic Bitcoin Reserve and barred the sale of bitcoin held in it. That protection applies only once coins are finally forfeited, so bitcoin tied to open criminal cases sits outside the reserve. BNB is covered by a separate Digital Asset Stockpile. Treasury Secretary Scott Bessent has described forfeited bitcoin as the foundation of the reserve.
The market barely reacted. Bitcoin traded near $85,300 on Wednesday, down less than 1% on the day. It has since slipped below $83,000, but that move is mostly being blamed on interest-rate worries and fund outflows rather than the government transfers. Some outlets have since reported a further movement of more than 12,000 BTC, worth about $1.1 billion. That has not been tied to any sale either.
The size of the government’s holdings explains the attention. Arkham estimates US-linked wallets hold about 325,000 BTC, roughly $27 billion or about 1.6% of bitcoin’s total supply. Total seized crypto is put at around $27.5 billion. Tuesday’s transfers are a small slice of that pile, but any confirmed liquidation would be closely watched.
The government has sold seized bitcoin before, though not recently, and past FTX-related movements have been linked to payouts for victims. For now, analysts say they need more on-chain activity before reading intent into the transfers. Watch for further deposits to exchange addresses, or a public notice from the Justice Department or US Marshals Service.
