US Government Crypto Wallet May Have Been Hacked, Raising Cybersecurity Concerns

A crypto wallet owned by the US government might have been compromised and infiltrated by hackers, raising concerns about the security measures

A crypto wallet that might be linked to the US government had large sums of crypto funds moved to another address, sparking speculation of a possible hack.

Arkham Intelligence, a crypto intelligence platform, reported the suspicious activity, which saw over $20 million in crypto funds being withdrawn from the government-linked address.

According to Arkham, the government wallet had been inactive for at least eight months before the suspicious activity occurred. The wallet contained seized digital monies from the 2016 Bitfinex cryptocurrency exchange heist, which were recovered by US authorities in 2022.

The government-controlled wallet initially withdrew $5.45 million in USDC from Aave, followed by the extraction of $1.12 million in USDT, the platform reported.

After the government crypto wallet transferred $20 million in crypto to a new address, the funds were quickly moved again and eventually ended up in Binance.

Interestingly, Binance has recently faced legal scrutiny over allegations of tax evasion and other illicit activities. Several reports suggested that the crypto exchange might be facing legal troubles.

According to crypto analysts, the government-controlled wallet being exploited by attackers is a likely explanation for the large sums of crypto funds being moved to DEX traders and a MetaMask swapper.

However, it's also possible that the seized funds are being reorganized after being inactive for several months, and the government is preparing to sell the digital assets.

The US government has not confirmed or denied its involvement with the Aave lending vaults, and the authorities have not commented on the crypto funds being transferred to DEX traders or Binance.

Meanwhile, Arkham Intelligence showed that Ethereum worth around $320,000 was moved to different exchanges. Additionally, smaller wallets received $80,000 in crypto funds, according to the platform.

Arkham also highlighted the possibility of the crypto hackers trading the digital assets for Ethereum and potentially laundering the funds using several dubious addresses.

As of the latest update, US investigators are reportedly pursuing the attackers and assessing the extent of the hacking incident, while the government has yet to release an official statement on the matter.