US Government Transfers $33M in Seized FTX Cryptos to Unknown Wallets

Highlights:

• The U.S. government transferred over $33M in FTX crypto, including 5,024 ETH and 54.89B SHIB.
• The sale of seized assets could create market pressure, affecting investor sentiment.
• Uncertainty surrounds the U.S. government’s Bitcoin transfer, sparking concerns over future market impact.

According to Arkham Intelligence data on December 03, the United States government has relocated about $33.6 million in crypto, previously seized from collapsed crypto exchange FTX and trading firm Alameda, to two unidentified addresses. The government first transferred 54.8 billion Shiba Inu (SHIB), valued at $1.55 million and then moved $17.2 million in Ethereum (ETH) to another wallet.

After this transfer, other cryptocurrencies were moved, including 13.5 million Binance USD (BUSD) and $36,070 in Axie Infinity (AXS). Additionally, the U.S. government moved $296,000 worth of other assets, including $93,950 in Numeraire (NMR), $106,430 in Compound (COMP), $50,710 in Wrapped Bitcoin (WBTC), and $47,350 in Yearn Finance (YFI). These transfers align with a broader crypto market rally and a rise in Ethereum’s on-chain activity.

ALERT: US GOVERNMENT MOVING $1.5 MILLION OF SHIBA INU pic.twitter.com/qpZGfw5gLr

— Arkham (@arkham) December 3, 2024

Government’s FTX Cryptos Transfer Raises Market Impact Concerns

This strategic move, highlighted by Arkham, emphasizes the continued redistribution of assets related to the FTX/Alameda case. The U.S. government’s transfer of 54.89 billion SHIB and other confiscated assets may impact the market. If liquidated on exchanges like Binance, SHIB prices may experience selling pressure, sparking investor concerns about the potential market effects.

Government Continues Crypto Sales Amid Strategic Debates

This move has occurred several times over the past year. The US government recently transferred about 19,800 BTC worth $1.9 billion to a Coinbase Prime deposit address. These assets, seized during the Silk Road case, are legally eligible for sale by the U.S. authorities.

The purpose of the coin transfer remains unclear, whether it’s part of a plan to trade or sell. U.S. lawmakers, including Senator Cynthia Lummis and President-elect Donald Trump, have suggested creating a “strategic Bitcoin reserve” in the country. However, community members have raised concerns. They worry that President Biden may sell the nation’s Bitcoin holdings. This could happen before Trump’s inauguration. Such a move might impact the proposed Bitcoin Reserve initiative.

ALERT: US GOVERNMENT MOVING $1.92B BTC TO NEW ADDRESS

Address: bc1q0av33ktzrkjps8exjex5gtv98vx225uqmzhspm pic.twitter.com/JSELsjFg5T

— Arkham (@arkham) December 2, 2024

Backlashes Over Bitcoin Transfer

Crypto executives criticized the U.S. government for transferring $1.9 billion in Bitcoin to Coinbase, calling it a “huge strategic mistake.” Jason Lowery, a U.S. Space Force engineer, tweeted on December 3 that the U.S. should never sell any Bitcoin it controls.

Crypto educator Toby Cunningham said the market would quickly absorb any Bitcoin the government sells. Some joked that Biden aims to cause damage before leaving the office. Bitcoin’s price briefly fell 3% to $94,500 during the transfer but has since recovered to around $96,600. 

The U.S. government now holds $19.48 billion in digital assets, including Bitcoin, Ethereum, USDT, WBTC, and BNB as the largest cryptocurrencies in its portfolio. The government’s large crypto holdings and recent actions have raised market concerns. Participants are questioning the possible effects on Bitcoin’s price and the broader market.

Many governments worldwide are increasingly showing interest in adopting cryptocurrencies. While Germany sold off more than 50K BTC earlier this year, efforts are underway to advocate for the country to repurchase its offloaded holdings. Meanwhile, Switzerland’s Canton Bern Parliament approved a Bitcoin mining investigation to assess its potential economic impact on the national grid.