Hackers Allegedly Steal $20 Million from U.S. Government Crypto Wallets

U.S. government crypto wallets may have been compromised, with reports indicating that hackers have potentially stolen $20 million in seized cryptocurrencies, including Ethereum, Tether, and Circle's USD Coin (USDC).

According to blockchain analytics firm Arkham, the suspicious transactions have raised alarms among observers. On-chain investigator ZachXBT also corroborated these findings on Telegram, suggesting that some of the stolen funds may include assets confiscated from the infamous Bitfinex hackers. Arkham identified that the address 0xc9E received seized assets from at least one wallet referenced in the Bitfinex court case documents.

The Bitfinex hack occurred in 2016, executed by Ilya Lichtenstein and his partner, rapper Heather Morgan, known as Razzlekhan. The duo managed to steal around $8 billion in Bitcoin from the exchange. Nearly a decade later, federal prosecutors are seeking a five-year prison sentence for Lichtenstein.

Arkham's Oct. 24 post noted that the hackers appeared to begin selling and laundering the stolen funds shortly after breaching the U.S. government wallets. Before these alerts were issued, Arkham reported that government wallets had withdrawn over $6.5 million in crypto from the decentralized finance platform Aave. Additionally, Etherscan data revealed that one U.S. government address paid up to $1,000 in Ethereum fees to transfer approximately $100,000 in cryptocurrencies.