TLDR
- The U.S. government transferred about $606,000 in Bitcoin (8 BTC) linked to the 2016 Bitfinex hack to Coinbase Prime
- The coins are tied to Ilya Lichtenstein, who stole 119,756 BTC from Bitfinex in 2016, worth ~$72M at the time
- Federal law requires the seized Bitcoin be returned to Bitfinex, not sold to the U.S. Treasury
- Bitfinex plans to use the returned funds to redeem Recovery Right Tokens and burn its LEO token
- The U.S. government currently holds 328,361 BTC valued at around $24 billion
On Thursday, the U.S. government moved approximately $606,000 worth of Bitcoin to Coinbase Prime. Blockchain data confirmed the transfer of 8 BTC, traced to funds stolen in the 2016 Bitfinex hack.
The transfer was flagged by on-chain analytics firm Arkham, which linked the coins to Ilya Lichtenstein, the hacker behind one of crypto’s earliest major exchange breaches.
THE US GOVERNMENT IS SELLING BITCOIN
The US Government just moved $606.47K to Coinbase Prime. This BTC was seized from the Bitfinex Hacker Ilya Lichtenstein.
Will they sell the stolen BTC on Coinbase? pic.twitter.com/urqQ6xVuZO
— Arkham (@arkham) April 17, 2026
Transfers to exchanges often raise concerns about potential sell-offs. But in this case, the government is legally required to return the coins to Bitfinex, not liquidate them.
This follows two earlier government wallet movements on March 3 and April 10, both connected to separate crypto-related legal cases.
On August 2, 2016, Lichtenstein exploited a vulnerability in Bitfinex’s multi-signature wallet system. He fraudulently authorized over 2,000 transactions, moving 119,756 Bitcoin to a wallet he controlled.
The stolen Bitcoin was worth roughly $72 million at the time of the hack. At today’s prices near $74,000 per coin, that same amount would be worth approximately $8.9 billion.
After the hack, Lichtenstein and his wife, Heather Morgan, spent over five years trying to launder the funds. They used crypto mixers, darknet markets, chain-hopping, and even purchased gold.
In February 2022, the FBI decrypted files stored in Lichtenstein’s cloud account. Inside was a spreadsheet containing over 2,000 private keys, giving agents access to nearly all of the stolen funds. Authorities seized approximately 94,636 Bitcoin, then valued at $3.6 billion.
What Happens to the Recovered Bitcoin
In early 2025, federal proceedings confirmed that the seized coins must be returned to Bitfinex in kind. The government cannot sell them and send the proceeds to the U.S. Treasury.
Bitfinex has a clear plan for the returned funds. The exchange intends to fully redeem all outstanding Recovery Right Tokens, which are digital claims issued to customers who lost funds in the hack.
At least 80% of any remaining net proceeds will go toward repurchasing and burning its UNUS SED LEO token, in line with its whitepaper commitments.
Lichtenstein was sentenced to five years in federal prison in November 2024. Morgan received 18 months.
Government’s Current Bitcoin Holdings
Lichtenstein was released in January 2026 under the First Step Act. He publicly thanked President Donald Trump on X following his release.
The U.S. government currently holds 328,361 Bitcoin across its federal wallets, valued at approximately $24 billion. It also holds around $146 million in Ethereum and various other cryptocurrencies.
The government said last year that its seized Bitcoin holdings would form part of a national strategic Bitcoin reserve.
