Bitcoin Whale Wallet Belonging to the US Government Hacked

Blockchain wallets linked to the US government containing US$20 million worth of crypto have been compromised

On October 24th, Blockchain intelligence firm Arkham reported that blockchain wallets linked to the US government and containing US$20 million worth of crypto, had been compromised. The wallets match up with official court documents, validating Arkham’s suggestions. The original US government wallet was tied to seizures connected to the 2016 Bitfinex seizures.  

Source: Arkham

They report that the wallets linked to the US government mysteriously moved US$20 million worth of USDC, USDT, aUSDC, and ETH funds to a new random wallet.  A transfer of US$5.4 million first raised alarm bells because it marked the first activity from the government-tied wallet in 8 months. There is further circumstantial evidence that the wallet tied to the US government was hacked — after the initial transfers, whoever controlled the new wallet tried to launder the funds through a variety of DeFi protocols and exchanges.

In 2022, a married couple was charged with trying to launder over US$4 billion worth of Bitcoin that was stolen during a hack of crypto exchange Bitfinex in 2016. The U.S. government has stated that it eventually seized about $3.6 billion worth of assets from the couple. This is the largest financial seizure, crypto or otherwise, ever. 

The pair, Ilya Lichtenstein and Heather Morgan, are alleged to have conspired to launder 119,754 Bitcoin stolen by a hacker who breached the centralized exchange Bitfinex. The Deputy attorney general noted in a statement, “In a futile effort to maintain digital anonymity, the defendants laundered stolen funds through a labyrinth of cryptocurrency transactions.”