U.S. Government Wallet Hack Sparks Speculation Over Bitfinex-Hack

Potential Hack on U.S. Wallet: $20M in Crypto Linked to Bitfinex Case

The crypto community is abuzz with speculation following reports of a potential hack on a U.S. government-linked wallet. The wallet, which holds cryptocurrency assets seized from the 2016 Bitfinex hack, was reportedly compromised, raising questions about the nature of recent fund movements and their possible implications.

U.S. Government Wallet Moves $20M in Crypto, Possibly Linked to Bitfinex Case

On October 24, blockchain analysts at Arkham Intelligence identified suspicious activity within the U.S. government-linked address 0xc9E. Around $20 million in various cryptocurrencies—USDC, USDT, aUSDC, and ETH—were transferred from this wallet to a different address (0x348), triggering concerns over an unauthorized hack. Shortly after the transfer, some of these funds, specifically 148 ETH, were reportedly sold on Binance, suggesting a possible laundering attempt.

Notably, the funds involved in these movements were initially seized from Ilya Lichtenstein and Heather Morgan, accused of executing the infamous Bitfinex exchange hack, which netted roughly 120,000 Bitcoin. Following the hack, authorities traced the funds back to multiple addresses linked to Lichtenstein, including 0xE2F, which court documents listed among the seized wallets.

At the time of writing, BTC price was trading at $67,783.58 after an intraday spike of 1.44% with $1.34T in market cap and $30.99B in 24-hour volume. ETH price was trading at $2,537.13 after an intraday spike of 0.69% with $305.38B in market cap and $16.61B in 24-hour volume. 

Suspicion Surrounding U.S. Government’s Intentions Amid Legal Battle

Market watchers and on-chain analysts are closely monitoring these wallets amid the unfolding United States v. Lichtenstein case. In light of Lichtenstein’s upcoming sentencing, speculation has emerged about whether these crypto selloffs might be part of a government strategy to manage the seized assets. 

However, recent reports indicate that the transfers may have occurred without official oversight, hinting at a potential hack. The U.S. Department of Justice has yet to confirm the hack. However,  this is the first AAVE transaction by the U.S. government since February. Amid increasing scrutiny on both Morgan and Lichtenstein, the crypto community is focused on the wallets’ movements to gauge future market impacts. 

If the selloff was indeed unauthorized, it raises serious concerns about securing seized crypto assets within government custody. As the situation unfolds, industry analysts continue to track these wallet addresses for further developments. Both Arkham Intelligence and Lookonchain are keeping a close eye on the activities of the 0x348 address, particularly its usage of suspected money laundering services.