The U.S. Government Moved $1.5 Billion in Seized Crypto in Two Days. Will It Sell?
Blockchain trackers flagged two massive government Bitcoin transfers within 48 hours, and traders are now watching every on-chain move for clues about whether billions in seized crypto could soon flood the market.
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U.S. government wallets transferred about $1.5 billion in seized cryptocurrency on October 7 and 8, 2026, mainly Bitcoin (CRYPTO: BTC), according to blockchain analytics firm Arkham. Traders quickly took notice since a government sale of this magnitude could significantly impact the market.
Despite the large movement, Bitcoin’s value rose about 1% over the past 24 hours, trading around $83,200 as of October 10. This is still roughly 34% below its all-time high of $126,080. So, is the U.S. government gearing up to sell its Bitcoin?
The U.S. Government Moved $1.5 Billion of Seized Bitcoin in Two Transfers
The first transfer occurred on October 7, when wallets associated with the Bitfinex hacker and Alameda Research sent about $470 million in Bitcoin, wrapped Bitcoin, and the stablecoin USDT to addresses likely linked to Coinbase Prime, Coinbase’s institutional arm that handles trading and asset custody.
The second, larger transfer occurred on October 8, when a government wallet linked to the Bitfinex hacker seizure sent 12,267 BTC, worth about $1.01 billion, to new, unidentified addresses. This Bitcoin came from the notorious 2016 Bitfinex hack, after which the Justice Department confiscated about 94,000 BTC in 2022. Arkham noted that this transfer did not result in any deposits to exchanges.
Even after these transactions, the government still holds an estimated 320,000 to 330,000 BTC, valued between $25 billion and $27 billion, according to Arkham. This amount represents roughly a quarter of the total 1.29 million BTC held by U.S. spot Bitcoin ETFs.
A 2025 Executive Order Prevents the Government From Selling Seized Bitcoin
Current government policy seems to oppose a sale. A March 2025 executive order established a Strategic Bitcoin Reserve for long-term holding and directed that any forfeited Bitcoin be added to this reserve instead of sold. The White House indicated that previous sales had already cost taxpayers over $17 billion in lost value.
However, the order allows exceptions. Courts can order the sale or return of coins, and victims of hacks or creditors may still claim some of the seized funds. Additionally, the order categorizes tokens other than Bitcoin, like the USDT from the October 7 transfer, into a separate Digital Asset Stockpile with different rules. Congress has also discussed codifying these rules into law.
Coinbase Prime Transfers Don’t Always Indicate a Bitcoin Sale
While every Bitcoin transaction leaves a public record detailing the amount, sender, and receiver, these records don’t specify why the coins were moved. Governments may transfer their holdings for various reasons, such as improving security, splitting large balances across new addresses, or changing custodians—the firms that store assets.
The October 7 transaction is particularly difficult to interpret because Coinbase Prime offers both custody services and trading. The government used this same route previously, moving about 3,800 BTC and 30,007 ETH, valued at more than $288 million, to Coinbase Prime on July 13. At that time, Arkham noted that the move might not indicate an imminent sale.
Is the U.S. Government About to Sell Its Bitcoin?
Currently, the U.S. government appears not to plan to sell its Bitcoin. The larger transfer of 12,267 BTC on October 8 went to new wallets instead of an exchange. Meanwhile, the October 7 transfer went to a platform that provides both trading and custody services, and the 2025 executive order mandates that forfeited Bitcoin be placed into a reserve. For Bitcoin holders, the ongoing discussion brings uncertainty, as the blockchain cannot reveal the government’s future intentions until the coins move again.
This situation could change if coins from the 12,267 BTC transfer are deposited into an exchange address, or if a court order or agency decision permits a sale. A sale of this scale could introduce about $1 billion of new supply into the market, potentially impacting Bitcoin’s value, especially as it currently trades around 34% below its peak.
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Sam Daodu is a crypto analyst and the editor of 24/7 Wall St.'s Crypto Desk, where he covers Bitcoin, XRP, Ethereum, Solana and the altcoins investors search for most. His work focuses on price levels, spot ETF flows, on-chain data and the regulatory decisions that move crypto markets, written so a first-time buyer and a seasoned trader can both use it.
Sam has written about crypto professionally since 2019 and has published more than 2,000 articles. Before joining 24/7 Wall St., he wrote for crypto media outlets and Web3 companies and ghostwrote for crypto founders and token launches. His analysis is syndicated on Yahoo Finance, MSN and AOL and has been cited by other crypto news sites. He also founded MacLabs Marketing, a content and personal branding agency for crypto founders and executives.
When he isn't reading charts, Sam is usually at the gym or watching One Piece, a series he maintains has better tokenomics than most altcoins.
