Hackers Steal $20 Million in Cryptocurrency from U.S. Government Wallets

In a recent cyber heist, hackers allegedly stole $20 million worth of cryptocurrency from U.S. government wallets, impacting assets such as USD Coin, Tether, aUSDC, and Ethereum, according to Arkham Intelligence. The funds are reportedly being laundered through suspicious addresses tied to known money laundering services.

The U.S. government is one of the world’s largest holders of cryptocurrency, with its holdings primarily obtained from asset seizures in criminal investigations. Estimates suggest that government-owned crypto accounts for over 1% of the total Bitcoin supply. Notably, authorities have accumulated Bitcoin holdings through high-profile operations like the 2013 Silk Road case, where nearly 174,000 Bitcoin were seized, marking a significant milestone in government cryptocurrency assets.

Blockchain analytics firms routinely monitor wallets associated with the U.S. government to track potential transactions. Historically, seized cryptocurrency has often been auctioned by the U.S. Marshals Service, a common process to manage confiscated assets. However, recent political discourse has seen a shift in attitudes toward these holdings.

At the Bitcoin 2024 conference in Nashville, former President Donald Trump committed to halting the sale of Bitcoin held by the government if reelected, emphasizing a policy to retain all government-acquired Bitcoin. Nevertheless, earlier this month, the U.S. Supreme Court declined to address a case concerning ownership of $4.3 billion in Bitcoin tied to Silk Road, potentially allowing the Biden administration to proceed with selling these assets.

This latest cyber theft and shifting regulatory landscape underscore the evolving relationship between the U.S. government, digital assets, and the heightened risks of cyber theft in the cryptocurrency space.