According to Woofun AI, the US government recently transferred $4.7 billion worth of seized crypto assets to a suspected Coinbase (COIN.US) Prime address. This operation directly triggered intense market questions about the consistency of implementation of Trump's strategic Bitcoin reserve policy.
Although federal officials have previously denied claims of the secret sale of seized bitcoins, this large-scale asset flow occurred after Trump clearly directed the preservation of national reserve assets, leaving the deal at the cutting edge of public opinion. The core point of contention was whether these assets were liquidated in violation of regulations or only as custodial transfers in compliance.
According to data compiled by Woofun AI, blockchain analysis agency Arkham Intelligence Company detected that various assets, including Bitcoin, encapsulated Bitcoin, and USDT, moved on-chain on October 7. The historical roots of these assets are complex, and they are mainly linked to two major cases: the Bitfinex hack in 2016 and the seizure case involving FTX founder Sam Bankman-Fried (SBF) and his affiliate Alameda Research.
Notably, the transfer occurred nine months after the US Bureau of Marshals refuted the claim that “Washington has handled” the “samurai wallet” criminal case and handed over the Bitcoin in the “Samurai Wallet” criminal case. Bitcoin Magazine reported in January that approximately $6.3 million worth of bitcoin handed over to the Department of Justice as part of a plea agreement appears to have been sold, laying the groundwork for the current crisis of trust. As one of the most active supporters of Bitcoin in the US Congress, Senator Cynthia Loomis has raised sharp questions about this, and she cannot understand why the government should dispose of these assets in a context where President Donald Trump has clearly instructed officials to keep Bitcoin as a national reserve. Faced with questions, the Bureau of Marshals clarified to DL News that they did not sell those bitcoins, and emphasized that before any confiscated cryptocurrencies were disposed of, they must go through a strict multi-tier authorization process, implying that the transfer may only be part of an administrative process rather than a final monetization process.
Looking at the policy context, the relevant sensitivity increased dramatically after Trump established a strategic Bitcoin reserve in March 2025. Its executive order clearly stipulates that bitcoins deposited in this reserve “shall not be sold” and should be retained as a reserve asset of the United States. The White House stated at the time that the government's premature sale of Bitcoin had caused taxpayers to lose more than $170 billion in asset value.
However, the order is not an absolute closure; it leaves room for exceptions for some government-controlled cryptocurrencies to be removed from federal control: when the court or law requires it, or when officials determine that the assets should be returned to verified victims of crime, for law enforcement purposes, or for other statutory forfeiture obligations, to be disposed of.
This exception is critical to understanding current asset transfers. In 2022, as an investigation into the Bitfinex hack, the US government seized around 95,000 bitcoins from wallets controlled by Ilya Lichtenstein and Heather Morgan. Lichtenstein later admitted carrying out that hacking attack, and a total of around 119,754 bitcoins were stolen in 2016. Authorities then seized assets worth approximately $475 million in connection with the theft. As these assets face different seizure and compensation claims, their legal treatment may be very different from Bitcoin, which has already been transferred to a strategic reserve.
Furthermore, in the criminal forfeiture procedure triggered by the FTX collapse, the judge in charge of hearing the Bankman-Fried case authorized the use of recovered funds to compensate victims, which added the potential meaning of compensation to victims for this asset transfer, making it consistent with the exceptions in the executive order.
The deal, which took place on Wednesday, is actually a test of the public's ability to interpret. If it is confirmed that bitcoins stored in strategic Bitcoin reserves are sold outside of the exceptions, it will once again raise questions about whether federal agencies are following established fund-raising policies; if for the purpose of custody, compensation, or other authorized forfeiture, it is a compliant operation.
Currently, Arkham's data shows that hundreds of millions of dollars of assets are being transferred from US government wallets to accounts most likely to be Coinbase Prime addresses. Whether these assets will stay there, be transferred to a new custodian account, or will be exchanged for dollars will determine whether this transaction is just another misstatement about the government selling Bitcoin, or whether it actually means that large-scale assets will be disposed of. Markets are closely monitoring subsequent developments to verify whether the Trump administration's reserve commitments are facing substantial challenges.