US Government Moves $288M in Seized Crypto to Coinbase Prime

The US government has seized $288 million Bitcoin And Ethereum to Coinbase Prime on Monday, on-chain tracker Arkham showed, reviving speculation that Washington could be preparing to sell off cryptocurrency it vowed to own.

The transfersspread over about half a day, included approximately 3,800 BTC worth $235 million and approximately 30,000 ETH worth $53 million, from various criminal cases. The Bitcoin came from funds seized from Ryan Farace, a dark web dealer known as “Xanaxman,” and the defunct exchange BTC-e, and was routed through intermediaries. purses before reaching Coinbase Prime. Ethereum has been linked to a $54 million money laundering case Oracle employee Brian Krewsonimmediately went to a disposal address.

Custody or payout?

Large holders usually store coins cold storageso moving them is drawing criticism, and the government has not provided a public explanation for the transfers – leading some parts of the market to view them as “a signal of a possible sell-off,” Tim Sun, senior researcher at crypto exchange HashKey, told Declutter.

The US Marshals Service selected Coinbase Prime in 2024 to hold and trade forfeited digital assets, and also handles the financing and staging – so the transfers could simply indicate the government is putting assets into administrated custody. So it is not yet clear whether the inflow is “in preparation for a sale or simply for the consolidation and custody of seized assets,” Sun explains.

The never-sell rule

The transfers come in the wake of US President Donald Trump’s March 2025 executive order, which created a strategic Bitcoin reserve and declared that the Bitcoin the government has poured into it ‘will not be sold’. Only Bitcoin that has “completed the final forfeiture process” can be moved to the reserve and protected from sale, Sun said, and even then the order can be halted. allows exceptions for coins, a court orders law enforcement or restitution to victims. The coins moved on Monday come from active criminal cases and are handled separately from the reserve. “The market needs to distinguish between Bitcoin held in reserve and the broader balance sheet positions of the US government,” Sun said.

Ethereum is completely outside the rule. It falls under a separate digital asset pool that the Treasury Department can manage within its legal powers, giving the government what Sun called “greater discretion.”

Scrutiny is heightened by the extent to which the reserve, which exists only by executive order, remains uncertain. Bills to codify this with a 20-year holding rule have stalled in Congress, with the Treasury and Commerce departments still working on it. dispute who manages the assets. Arkham still tracks US government wallets containing $20.6 billion in crypto, including 324,552 BTC – one of the largest government crypto holdings anywhere, against which the $288 million is little more than a rounding error.