The U.S. government is active on the blockchain again, moving approximately $606,000 worth of bitcoin (around 8 BTC) to Coinbase Prime, the institutional platform of the crypto exchange. On-chain data indicates these coins are tied to Ilya Lichtenstein, the mastermind behind the 2016 Bitfinex hack that saw nearly 120,000 BTC stolen.
Transfers to exchanges are often interpreted as a sign of potential selling pressure. However, this move is likely not a liquidation. These bitcoin have a court-mandated destination — not the U.S. Treasury.
Court Ruling: Return, Not Liquidation
Early 2025 federal proceedings solidified the in-kind restitution of the seized assets to Bitfinex, requiring the government to return the coins rather than sell them off. Bitfinex intends to use the returned funds to fully redeem all outstanding Recovery Right Tokens (RRTs) — digital claims issued to customers who suffered losses in 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 and Aftermath
In August 2016, Lichtenstein hacked into Bitfinex and fraudulently authorized over 2,000 transactions, transferring 119,756 BTC to a wallet under his control. At the time, the exploit was worth roughly $72 million; today it would be worth $8.9 billion. Over the following years, he employed sophisticated money laundering techniques using crypto mixers, darknet markets, chain-hopping, and gold purchases. In 2022, investigators seized a portion of the stolen BTC, then valued at $3.6 billion. Lichtenstein was sentenced to 60 months in federal prison in 2024 and was released in January 2026 under the First Step Act, thanking President Trump on X.
The stolen coins remained in government custody. Last year, the U.S. said its holdings of seized BTC would form part of a national strategic bitcoin reserve. As of writing, the government holds bitcoin valued at approximately $24.54 billion, ether at roughly $146 million, and several other cryptocurrencies.