U.S. government-linked wallets have moved another 12,267 BTC, worth about $1.01 billion, to Coinbase Prime, extending several days of large transfers involving seized Bitcoin. Lookonchain flagged the movement on October 8 as the coins left government-labeled addresses. Subsequent tracking by Ember showed the full 12,267 BTC reaching Coinbase Prime, lifting its estimate of government transfers into the platform to about 18,482.7 BTC, worth roughly $1.53 billion, during its latest two-day tracking window. That Lookonchain, Ember, and Galaxy Research each traced the flows within days of one another reflects how closely government wallet activity is monitored, given the substantial Bitcoin the federal government has accumulated through seizures and recoveries.

The transactions establish a change in custody and asset location, not a Bitcoin sale. Coinbase Prime provides both institutional custody and execution services, and no U.S. agency has publicly identified the latest movements as liquidations. Because the same platform serves both functions, a liquidation would only be distinguishable through subsequent onchain movements or an explicit agency disclosure, making the coins' behavior after arrival the detail to watch.

Transfers Follow $770 Million Movement Earlier in the Week

The latest batch follows substantial activity earlier in the week. Galaxy Research traced approximately 9,261 BTC, worth around $770 million, into the government's Coinbase Prime deposit infrastructure across October 6 and October 7, comprising roughly 834 BTC on the first day and another 8,428 BTC the following day.

Nearly half of those coins came from Bitcoin recovered from the 2016 Bitfinex hack, while another portion was linked to known Binance-related seizures. Galaxy also identified 2,456 BTC from addresses it had not previously labeled as government holdings, classifying them as likely seizure-related because they followed the same deposit route into the government-controlled Coinbase Prime infrastructure. That attribution remains provisional, since third-party labeling can only infer ownership until the agencies themselves confirm the origin of previously unlabeled wallets.

The Bitfinex holdings originate from the federal recovery of more than 94,000 BTC controlled by Ilya Lichtenstein after the theft of 119,754 BTC from the exchange. The Justice Department recovered the coins in 2022 after investigators obtained the private keys to the wallet containing most of the stolen funds.

Government crypto wallets have used the same custody route before. In July, approximately $288 million in Bitcoin and Ether moved into Coinbase Prime, followed by another $12.9 million in Bitfinex and FTX-linked assets.

Coinbase Prime Deposits Do Not Confirm Government Sales

The U.S. Marshals Service selected Coinbase Prime in 2024 to safeguard and trade large-cap digital assets managed through federal forfeiture programs. A deposit into the platform can therefore represent custody consolidation, case administration, or execution preparation without establishing that Bitcoin was sold.

The distinction is particularly important the creation of the Strategic Bitcoin Reserve. President Donald Trump's March 2025 executive order states that finally forfeited Bitcoin deposited into the reserve shall not be sold. The order still allows government digital assets to leave federal holdings when required by a court, returned to identifiable victims, used for law enforcement purposes, or released to satisfy statutory forfeiture requirements.

That exception is relevant to Bitfinex-linked assets, because the recovered Bitcoin remains tied to restitution and forfeiture proceedings rather than automatically becoming unrestricted reserve property. The White House said in July that the Treasury Department was still structuring the Bitcoin reserve, leaving custody and asset classification important when interpreting government wallet movements. Until that structure is settled, the observable signals are onchain: whether the newly deposited coins remain in Coinbase Prime custody, whether more government-labeled addresses move, and whether any agency formally discloses a liquidation.

Bitcoin was trading near $82,000 on October 9, down from above $85,000 earlier in the week. The decline coincided with the government transfers, but the onchain movements alone do not establish that federal selling caused the price move.