- US government-linked wallets transferred 9,261 Bitcoin worth about $770 million to Coinbase Prime over two days, but blockchain data does not show that the coins were sold.
The US government has moved about $770 million worth of Bitcoin to Coinbase Prime, putting a large pool of seized cryptocurrency under renewed market scrutiny as traders assess whether the transfer represents routine custody management or preparation for a potential disposition.
According to Galaxy Research's on-chain analysis, government-linked wallets transferred approximately 9,261 BTC between Oct. 6 and Oct. 7. About half of the Bitcoin can be traced to assets recovered from the 2016 Bitfinex hack, while another portion came from previously identified government seizures.
Galaxy also identified 2,456 BTC that had not previously been attributed to government holdings. Because those coins followed the same transfer path into the Coinbase Prime deposit address, the research firm classified them as government-seized assets. The move is significant in size, but it does not establish that the US government has started selling Bitcoin.
Why the $770 Million Bitcoin Transfer Matters
The destination is central to the market reaction. Coinbase Global Inc. (NASDAQ: COIN) operates Coinbase Prime as an institutional platform providing custody and trading infrastructure. The US Marshals Service selected Coinbase Prime in 2024 to manage large-cap digital assets held through federal asset-forfeiture operations. The arrangement covers custody as well as trading and disposition services.
That means a transfer to Coinbase Prime can have more than one explanation. It can represent the movement of seized cryptocurrency into institutional custody, preparation for an authorized transaction, or administrative handling of assets involved in forfeiture proceedings.
The US Marshals Service's asset-forfeiture program confirms that the agency serves as the primary custodian of property seized through the Department of Justice's forfeiture program, including cryptocurrency.
Galaxy's analysis puts the government's tracked Bitcoin holdings at approximately 319,086 BTC following the latest transfers. That means the 9,261 BTC moved to Coinbase Prime represents roughly 2.9% of the tracked government holdings.
The holdings themselves are also not a single pool of freely disposable Bitcoin. Some assets remain connected to criminal investigations, forfeiture proceedings, restitution claims, or other legal processes. That is particularly relevant for Bitcoin recovered from the Bitfinex hack. Government-controlled cryptocurrency can remain subject to court proceedings and restitution requirements rather than becoming unrestricted reserve assets.
The movement therefore adds to the growing list of large Bitcoin transactions being tracked by investors, but the blockchain record does not reveal the government's final intention.
Strategic Bitcoin Reserve Changes the Selling Question
The transfer also needs to be viewed through the US government's Strategic Bitcoin Reserve policy. President Donald Trump signed an executive order in March 2025 establishing the Strategic Bitcoin Reserve and directing that qualifying government Bitcoin be held as a reserve asset. The order says Bitcoin deposited into the reserve "shall not be sold," while allowing exceptions involving identifiable victims, law-enforcement operations, equitable sharing, and court orders.
The White House said the reserve would initially be capitalized with Bitcoin owned by the Treasury that had been finally forfeited through criminal or civil asset-forfeiture proceedings. Other agencies were instructed to review their holdings and legal authority to transfer qualifying Bitcoin into the reserve.
That framework makes it important to distinguish between government-held Bitcoin and Bitcoin that has actually been placed into the Strategic Bitcoin Reserve.
Not every Bitcoin controlled by a federal agency necessarily has the same legal status. Coins connected to ongoing forfeiture proceedings or assets that must be returned to victims can be handled under different requirements.
Galaxy's latest assessment also found that about 71% of the government's tracked Bitcoin holdings are concentrated in assets associated with the LuBian case and recovered Bitfinex funds. The firm identified approximately 127,271 BTC connected to LuBian-related assets and about 94,643 BTC associated with the Bitfinex recovery.
The latest transfer also follows earlier government movements to Coinbase Prime. In July, government-linked wallets transferred roughly $288 million in Bitcoin and Ether to the platform, again prompting speculation about a potential sale even though the transfers themselves did not establish that liquidation had occurred.
The timing comes as Bitcoin remains under pressure after its recent recovery. Recent Bitcoin ETF flows have shown how quickly institutional demand can influence the market, while macroeconomic factors have also become increasingly important for BTC.
For now, the most concrete fact is the transfer itself: 9,261 BTC worth approximately $770 million moved to a Coinbase Prime address associated with government-controlled assets over Oct. 6-7.
There is no confirmed evidence in the blockchain data that the government sold those coins. Further transfers, an official government disposition notice, or identifiable transactions showing the Bitcoin being sold would provide stronger evidence of a liquidation.
Until then, the Coinbase Prime movement shows that the US government is actively managing a substantial Bitcoin portfolio, but it does not by itself establish that a $770 million Bitcoin sale is underway.