Summary
- On Monday, the U.S. government transferred $288 million in confiscated Bitcoin and Ethereum to Coinbase Prime, as reported by on-chain tracker Arkham.
- This activity has sparked speculation regarding a potential sale, though it's important to note that Coinbase Prime serves as the government's custodian, and such a deposit does not necessarily indicate an impending sale.
- A 2025 executive order prohibits the sale of Bitcoin within the Strategic Bitcoin Reserve, but this order pertains only to coins that have been fully forfeited, while these transfers appear to involve coins from ongoing criminal investigations.
On Monday, the U.S. government moved $288 million in seized Bitcoin and Ethereum to Coinbase Prime, according to Arkham, a blockchain analytics firm, raising questions about whether the government might be considering a sale of these cryptocurrencies.
The transfers occurred over approximately six hours and included around 3,800 BTC valued at $235 million and about 30,000 ETH worth $53 million, originating from various criminal cases. The Bitcoin was obtained from funds linked to Ryan Farace, a dark-web dealer known as "Xanaxman", and the now-defunct BTC-e exchange, with the funds passing through intermediary wallets before arriving at Coinbase Prime. The Ethereum, involved in a $54 million money laundering case associated with Oracle employee Brian Krewson, was sent directly to a deposit address.
THE US GOVERNMENT JUST DEPOSITED $280M OF CRYPTO TO COINBASE PRIME
The US Government just deposited a total of $288.33M of BTC and ETH to Coinbase Prime. This includes confiscations from Brian Krewson, BTC-e, and Ryan Farace.
Will they be selling it all? pic.twitter.com/M5srRI3KJU
— Arkham (@arkham) July 13, 2026
Custody or Liquidation?
Typically, large holders store their cryptocurrencies in cold wallets, so any movement raises eyebrows. The government has not publicly clarified the purpose of these transfers, leading some market participants to interpret them as a “signal for a potential sell-off,” according to Tim Sun, a Senior Researcher at crypto exchange HashKey.
In 2024, the U.S. Marshals Service selected Coinbase Prime to manage and trade forfeited digital currencies, which also includes financing and staging responsibilities. Thus, the recent transfers may simply signify that the government is consolidating assets into a managed custody arrangement. Sun noted that it remains uncertain whether the inflows are "in preparation for a sale or merely for the management and custody of seized assets."
The No-Sale Directive
The transfers occurred following a March 2025 executive order from U.S. President Donald Trump that established a Strategic Bitcoin Reserve, which stipulates that Bitcoin deposited into this reserve "shall not be sold." Only Bitcoin that has "completed the final forfeiture process" can be transferred into the reserve and protected from sale, Sun explained. Even then, the order allows exceptions for coins directed by a court for law enforcement or victim compensation. The coins transferred on Monday are linked to ongoing criminal cases and are not part of the reserve. "The market should differentiate between Bitcoin held in the reserve and the broader holdings of the U.S. government," Sun emphasized.
Ethereum is not subject to this directive and falls under a separate Digital Asset Stockpile that the Treasury manages with more flexibility, granting the government what Sun described as "greater freedom of disposal."
The scrutiny surrounding these transfers is heightened by the uncertain status of the reserve, which currently exists only through executive order. Proposals to formalize it in law with a 20-year holding requirement have stalled in Congress, and disputes between the Treasury and Commerce departments over asset control continue to persist. Arkham continues to monitor U.S. government wallets containing $20.6 billion in cryptocurrency, including 324,552 BTC—making it one of the largest state-held crypto reserves globally, of which the $288 million represents a minor fraction.