US Government Shifts $770M in Bitcoin as Mystery Wallets Emerge

Galaxy Uncovers Previously Unknown Bitcoin Holdings

What started Tuesday as a $71 million bitcoin transfer turned into a much bigger affair by Wednesday, Oct. 7. Galaxy Research tracked another 8,428 BTC heading to Coinbase Prime, bringing the two-day tally to roughly $770 million.

Nearly half the coins originated from the notorious 2016 Bitfinex hack, with another portion connected to Binance seizures. But the real eyebrow-raiser was the appearance of 2,456 BTC from wallets researchers hadn’t previously associated with Uncle Sam.

The discovery raises questions about how much of Washington’s cryptocurrency inventory remains unidentified. Galaxy attributed the mystery coins to government seizures based on their destination, although that connection has not been independently established.

“But 2,456 BTC came from previously unknown holdings, which we now assume were USG seizures because they deposited into the USG Coinbase Prime deposit address,” Galaxy Research explained.

Coinbase Prime’s Transaction History Offers New Clues

The receiving address has accumulated 11,567 BTC since December 2025, including 6,406 BTC from recognized government wallets and approximately 5,160 BTC from unlabeled senders. Galaxy found that both groups followed similar deposit procedures, with activity dating back to April.

The transaction history offers a glimpse into how federal authorities have handled confiscated cryptocurrency. Coinbase provides institutional custody and trading services to the U.S. Marshals Service, replacing much of the old-fashioned auction machinery once used to dispose of seized bitcoin.

Yet a transfer to an exchange doesn’t necessarily mean a sale is underway. The ultimate destination of the assets remains unclear. Especially after President Donald Trump initiated a Strategic Bitcoin Reserve executive order that says BTC seized by the U.S. government will never be sold.

2 Major Cases Account for 71% of Government Holdings

Galaxy’s accounting places the federal bitcoin balance at 319,086 BTC, down from its historical peak of 352,587 BTC on Aug. 13, 2024. “Today’s balance by case. 71% sits in two buckets that are not settled government property: the Lubian coins and the Bitfinex recoveries,” the research firm noted.

The Bitfinex holdings include approximately 94,643 BTC associated with the exchange’s 2016 security breach. A federal court approved returning those assets to Bitfinex in January 2025, although the principal wallet had not moved when Galaxy published its findings.

The second collection involves 127,271 BTC linked to Chen Zhi and the Lubian mining operation, which became the subject of a Justice Department civil forfeiture complaint in October 2025.

Wednesday’s Outflow Ranks Ninth in Government History

Galaxy examined 6,134 transactions dating back to 2013 and calculated that federal wallets had received 555,260 BTC while sending out 236,173 BTC. Those figures exclude movements between government-controlled addresses.

The firm’s historical comparison placed Wednesday’s activity ninth among the largest daily government bitcoin outflows, making it the biggest since Dec. 2, 2024.

Washington’s approach to confiscated cryptocurrency has changed considerably. Federal marshals auctioned the Silk Road bitcoin between 2013 and 2015, but seizures have substantially outpaced sales since 2020.

The latest transactions add another chapter to that history without settling the central question. The coins have reached Coinbase Prime, but whether they’re destined for liquidation, continued custody, or eventual restitution remains anyone’s guess.

Hero/Feature image source: Arkham Intelligence – US Gov wallets.