U.S. Government Crypto Wallets Potentially Compromised

Observers have alerted the public to suspicious on-chain transactions that suggest U.S. government crypto wallets may have been compromised. According to Arkham, unknown hackers have possibly stolen $20 million in seized cryptocurrencies, including Ethereum (ETH), Tether (USDT), and Circle USD Coin (USDC), from addresses controlled by the U.S. government.

Details of the Incident

The developing story, corroborated by on-chain sleuth ZachXBT on Telegram, might involve funds confiscated from the notorious Bitfinex hackers. Arkham reported that address 0xc9E received seized assets from at least one wallet mentioned in the Bitfinex court case documents.

UPDATE: US Government linked address appears to have been compromised for $20M. $20M in USDC, USDT, aUSDC, and ETH has been suspiciously moved from a USG-linked address 0xc9E6E51C7dA9FF1198fdC5b3369EfeDA9b19C34c to…

Bitfinex was hacked in 2016 by Ilya Lichtenstein and his partner Heather Morgan, AKA Razzlekhan, who successfully stole about $8 billion in Bitcoin from the crypto exchange. Nearly a decade later, federal prosecutors requested a five-year sentence for Lichtenstein.

Suspicious Transactions

Transactions suggest the hackers started selling and laundering the funds after breaking into U.S. government wallets. Arkham’s October 24 post highlighted the suspicious activity, noting that the funds were moved to wallet 0x348, which has already begun converting the stolen assets to ETH. Arkham believes the attacker is laundering the proceeds through addresses linked to a money laundering service.

Before flagging the U.S. government transactions, Arkham noted that government wallets withdrew over $6.5 million in crypto from decentralized finance lender Aave. Etherscan data revealed that one U.S. government address paid up to $1,000 in Ethereum fees to move about $100,000 in cryptocurrencies.

This is a developing story. Stay informed on the latest updates in the cryptocurrency world.

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