The U.S. government moves $606,000 in bitcoin linked to the 2016 Bitfinex hack to Coinbase

Bitfinex plans to use the returned coins to redeem all Recovery Right Tokens and devote at least 80 percent of remaining net proceeds to repurchasing and burning its UNUS SED LEO token.

What to know:

• The U.S. government moved about $606,000 in bitcoin tied to the 2016 Bitfinex hack to Coinbase Prime, a transfer that may not necessarily signal imminent selling.
• Federal proceedings require that the seized Bitfinex-related bitcoin be returned in kind to the exchange, rather than sold and sent to the U.S. Treasury.
• Bitfinex plans to use the returned coins to redeem all Recovery Right Tokens and devote at least 80 percent of remaining net proceeds to repurchasing and burning its UNUS SED LEO token.

The U.S. government is active on the blockchain again, moving approximately $606,000 worth of bitcoin BTC$74,662.18 to Coinbase Prime.

These are not just any coins. On-chain data suggests the transferred 8 BTC are linked to Ilya Lichtenstein, the man behind the decade-old hack of the OG exchange Bitfinex, according to data tracked by Arkham.

Transfers to exchanges are often interpreted as a sign of potential selling pressure. However, that is not always the case and could also reflect routine wallet movements, custody changes, or other non-selling activity.

These coins have destination

The bitcoin tied to the Bitfinex hack, which saw Lichtenstein walk away with 119,756 BTC, has a court-mandated destination and it's not U.S. Treasury.

In early 2025, federal proceedings solidified the in-kind restitution of the seized assets to Bitfinex, requiring the government to return the coins rather than liquidate them independently.

Bitfinex intends to use the returned funds to fully redeem all outstanding Recovery Right Tokens – digital claims issued to customers who suffered losses in the hack – and to allocate at least 80% of the remaining net proceeds to repurchase and burn its UNUS SED LEO token.

The 2016 hack

In August 2016, Lichtenstein hacked into Bitfinex and fraudulently authorized more than 2,000 transactions, transferring 119,756 BTC to a wallet under his control. At that time, the exploit was worth roughly $72 million. (As of today, it would be worth $8.9 billion)

What followed were years of sophisticated money laundering via crypto mixers, darknets, and chain-hopping between coins, as well as the purchase of gold.

Finally, in 2022, investigators caught up and seized a portion of the stolen BTC, then worth $3.6 billion. In 2024, Lichtenstein was sentenced to 60 months in federal prison and was released in January 2026 under the First Step Act, thanking President Donald Trump on X.

The stolen coins, however, remained in government custody. The U.S. said last year that its holdings of seized BTC would form part of a national strategic bitcoin reserve. As of writing, the government holds bitcoin valued at about $24.54 billion, ether at roughly $146 million, and several other cryptocurrencies.

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