Government Wallets Move 12,267 BTC
On Thursday, wallets associated with the U.S. government transferred 12,267 BTC, worth roughly $1.01 billion, out of an address that holds coins seized in the 2016 Bitfinex hack. Blockchain analytics firm Arkham tracked the coins to new, unlabeled addresses, with a second transaction going to a different wallet.
Importantly, no deposit to a trading venue was recorded. That pattern looks more like internal reorganization than a sale, although the destination wallets have not been publicly identified.
Why Traders Are Watching Closely
The transfer came a day after a more exchange-oriented flow. Around 3,200 BTC (about $264 million) and $119 million in USDT reached Coinbase Prime deposit addresses, coming from wallets linked to the FTX/Alameda and Bitfinex seizures. Coinbase Prime also offers custody, so a deposit there does not automatically signal a sale. Earlier in the week, more than $100 million in BTC and BNB had also been moved.
Market participants are sensitive to these transfers because large, unexpected supply can weigh on prices. Yet the policy backdrop points the other way: a March 2025 executive order directed that forfeited bitcoin be placed in a Strategic Bitcoin Reserve rather than sold. According to Arkham, the government still holds about $25.5 billion in crypto.
Senate Turns Its Attention to Tether’s U.S. Partner
In Washington, Senator Richard Blumenthal, the top Democrat on the Senate Permanent Subcommittee on Investigations, sent a letter to Cantor Fitzgerald CEO Brandon Lutnick. Lutnick is the son of Commerce Secretary Howard Lutnick, who passed leadership of the firm to him before joining the administration.
Cantor holds and manages Tether’s reserves in the United States, and the two companies share other business interests. Blumenthal asked about the firm’s banking and sanctions safeguards and about the steps it has taken to examine allegations that USDT was used in illicit finance, including Iran’s shadow banking network and Russian sanctions evasion. He also noted that while Tether presents itself as based in El Salvador, most of its assets sit in the United States.
Neither Cantor Fitzgerald nor Tether had responded to requests for comment at the time of reporting.
The Political Angle Ahead of November
The inquiry carries extra weight because of the election calendar. Prediction markets currently give Democrats a better-than-even chance of winning a Senate majority, with Kalshi near 61% and Polymarket near 64%, and odds above 90% for a House flip. A change of control would give critics of the crypto industry committee gavels and subpoena power.
What It Means for the Market
For investors, the picture is mixed. Government wallet activity keeps supply concerns alive, but the absence of exchange deposits and the reserve policy argue against forced selling. Meanwhile, regulatory scrutiny of stablecoin issuers is moving from the margins toward the center of the U.S. policy debate, just as lawmakers weigh how to regulate digital assets. Traders will likely track both on-chain flows and any replies to the Senate letter in the coming days.
