US Government-Linked Crypto Wallet Hacked: Over $20M Swiped

• A U.S. government-linked crypto wallet has been drained of $20 million.
• The 2016 Bitfinex hack saw 120,000 BTC ($8.1 billion today) stolen.
• The U.S. government holds over $14 billion worth of crypto.

A hacker has daringly stolen millions in Ethereum (ETH) and stablecoins directly from the U.S. government.

The wallet contained funds seized from the 2016 Bitfinex hack.

U.S. Government Hacked

As per an Oct. 24 post from Arkham Intelligence, a U.S. government-linked wallet was drained of $20 million in ETH, USD Coin (USDC), Aave USDC (aUSDC), and Tether (USDT).

More specifically, the wallet lost $13,7 million in aUSDC, $5.44 million USDC, $1.112 million in USDT, and 178 ETH worth $447,000.

Though now virtually empty , the hackers left behind $132 worth of Donald Trump memecoin, MAGA (TRUMP).

The wallet that received the government’s crypto then used an exchange aggregator called 1inch to swap the aforementioned stablecoins into ETH tokens.

As noted by crypto sleuth  ZachXBT , it was definitely a nefarious actor, as $40,000 batches of ETH were instantly being sent to being sent to exchanges.

“It’s a likely theft as funds tied to the USG [U.S. government] started going to instant exchanges like N exchange, Switchain, and Binance nested service,”

Lookonchain highlighted that 148 ETH $372,000 was distributed across ten Binance deposit wallets.

However, ZachXBT notes that these are Binance “nested exchanges,” meaning they only use Binance for liquidity and aren’t part of the exchange themselves.

Perhaps showing the depth of the scheme , Arkham posted an alert to X—prior to the $20 million hack—that the U.S. Government had pulled $5.4 million out of Aave.

This would mark this particular wallet’s first activity in eight months.

The Bitfinex Wallet

According to Arkham, the wallet that was hacked held funds seized from nine separate addresses relating to the 2016 Bitfinex hack.

In 2016, a married couple decided to make the most of a security breach on the Bitfinex exchange and swiped and laundered a gigantic 120,000 BTC worth $8.1 billion today.

The duo were arrested in 2022. Following an August 2023 guilty plea , one was sentenced to 18 months in prison for participating in the theft.

Similarly, the husband, who actually orchestrated the hack and money laundering, had his sentence lowered from 20 to five years.