On February 28, the U.S. government took a significant step by initiating the transfer of a vast amount of Bitcoin, valued at nearly a billion dollars. This action involves Bitcoin confiscated during the 2016 Bitfinex hack, highlighting the government’s role as a major entity in the cryptocurrency space. Arkham Intelligence reports that between 18:39 and 19:55 UTC, four separate transactions were executed, moving Bitcoins from two wallets associated with the confiscated funds.
The sequence of these transactions began with a modest transfer of 1 Bitcoin, valued at $60,200, signaling the commencement of this large-scale operation. Following this, the authorities moved an additional 2,817 Bitcoins, translating to roughly $172.74 million, to undisclosed addresses.
The operation’s magnitude became more apparent with subsequent transfers from another wallet, including a minor 0.01 Bitcoin and a substantial 12,267 Bitcoins, cumulatively worth about $748.46 million. This series of transactions amounted to an approximate total of $922 million at the time of transfer, underscoring the significant impact of these movements on the cryptocurrency market.
The U.S. as a Dominant Bitcoin Holder
With these recent activities, the U.S. government cements its position as a dominant Bitcoin whale, with Arkham Intelligence estimating its holdings to be just over 200,000 Bitcoins. This portfolio, valued at $12.44 billion, includes approximately 94,600 Bitcoins directly linked to the Bitfinex hack. The hack, which occurred in 2016, resulted in the theft of almost 120,000 Bitcoins, marking a significant event in the cryptocurrency industry.
In a bid to rectify the aftermath of the hack, the U.S. authorities successfully returned more than 27,000 Bitcoins to Bitfinex in February 2019. These Bitcoins were then converted to dollars and distributed to holders of Recovery Right Token (RRT) tokens, providing a form of restitution to those affected by the hack.
The mastermind behind the 2016 Bitfinex hack, Ilya Lichtenstein, later admitted to breaching the exchange’s security over a period. Lichtenstein’s motivations for targeting Bitfinex have been linked to the challenges he faced with his technology startup in San Francisco, offering insight into the hack’s underlying causes.