US Govt Crypto Wallet Left Unlocked, Hackers Cash In

A crypto wallet holding funds that are likely to belong to the United States government has suffered a hack. In an October 24 post, blockchain intelligence platform

A crypto wallet that likely belongs to the United States government has been hacked, leading to the theft of around $20 million in various assets.

Blockchain intelligence platform Arkham Intelligence highlighted the activity in a post on October 24. According to Arkham, the wallet tied to the U.S. government had several assets mysteriously transferred to a wallet controlled by the attacker.

The stolen assets include USDC, USDT, USD, and ETH.

𝗨𝗣𝗗𝗔टी온: 𝗨𝗦 𝗚𝗼𝘃𝗲𝗿𝗻𝗺𝗲𝗻𝘁 лінк адрес з'явився 𝗯𝗲𝗶𝗻𝗴 𝗰𝗼𝗺𝗽𝗿𝗼𝗺𝗶𝘀𝗲𝗱 𝗳𝗼𝗿 $𝟮𝟬𝗠.

$20M in USDC, USDT, aUSDC and ETH has been suspiciously moved from a USG-linked address 0xc9E6E51C7dA9FF1198fdC5b3369EfeDA9b19C34c to… pic.twitter.com/UXn1atE1Wx

The alarm follows a previous alert that the same wallet had shifted around $5.4 million, marking the first activity on the wallet in over eight months. An additional $1.12 million transfer occurred after the transaction, all within a short time frame.

After the unauthorized transfers, the hacker quickly shuffled their ill-gotten gains, selling off the assets and laundering the proceeds through various addresses linked to money laundering services.

The hacker’s address had around $13.19 million aUSDC in balance at the time of writing.

But how did these funds land in a U.S. government-linked wallet in the first place?

Stolen U.S. Govt Crypto Tied to Bitfinex Hack

The majority of the U.S. government’s crypto assets come from seizures, and this case is no exception. Arkham Intelligence reported that the stolen $20 million links back to the government’s confiscation from the notorious 2016 Bitfinex hack.

Analysis revealed that the exploiter’s address received transfers from nine separate seizure wallets owned by the government, including one explicitly mentioned in official court documents related to the investigation.

Authorities went on to confiscate the illicit holdings of the Bitfinex hack’s original perpetrators, Ilya Lichtenstein and Heather Morgan, who were apprehended in 2022.

With the duo’s sentencing on fraud and money laundering charges set for November 2024, the timing of the recent hack has also sparked discussion. Many speculate that the asset movements could be a planned liquidation by the US government or another potential hack orchestrated by the infamous couple.

On the Flipside

Why This Matters

A hack on a U.S. government-linked crypto wallet highlights cybercriminals’ growing audacity, underscoring the need for stronger security measures to safeguard the industry.

Read this article for more about the US portfolio and its asset shifts:

US Govt Moves 4,000 Bitcoin: Looming Sell-off or Nothingburger?

MicroStrategy’s Michael Saylor has been attempting to smooth things over with the industry over the recent months:

Saylor U-Turns Bitcoin Custody Comments Following Backlash