US government likely lost $20M in crypto hack

Blockchain analysts claim that approximately $20 million in cryptoassets have been moved from US government-linked addresses, likely due to a hack.

Analysts at Arkham Intelligence identified unusual activity involving two addresses, where stablecoins such as USDC, USDT, aUSDC, and ethereum (ETH) were “suspiciously moved.” These addresses are associated with funds seized from the 2016 Bitfinex exchange hack.

According to Arkham, the moved stablecoins are now being sold for ETH.

“We believe the attacker has already begun laundering the proceeds through suspicious addresses linked to a money laundering service,” the analysts stated.

Pseudonymous blockchain investigator ZachXBT also suggested it was likely a theft, as the funds quickly moved to "exchanges like N Exchange, Switchain, and Binance nested services.” In this context, “nested services” refer to exchanges using the major crypto exchange for liquidity.

There has been no official statement from US government-related agencies about the possible hack.

According to data from 21.co, the US government currently holds around $13.7 billion in bitcoin (BTC). Approximately 44% of this came from the Bitfinex hack seizure in January 2022, with the rest acquired during Silk Road-related seizures in 2020 and 2022. In total, the US government has reportedly seized 215,000 BTC (worth $14.5 billion) since 2020, which is gradually being liquidated. The seized funds from the Bitfinex hack are expected to be returned to exchange clients after the legal process concludes.

In 2023, a married couple from New York City pleaded guilty to money laundering charges stemming from the theft of around 120,000 BTC from the exchange.