$20 Million Drained and Returned: Government Wallet Under Scrutiny
Last week, a mysterious attack targeted a cryptocurrency wallet under the control of the US government, resulting in the theft of over $20 million. However, by the following morning, the majority of the funds had been recovered. Approximately $700,000 remains unaccounted for, traced to the cryptocurrency exchanges HitBTC, Switchain, and N Exchange.
The incident caught the attention of blockchain analytics firm Arkham Intelligence, which meticulously documented the movement of the stolen assets. Renowned blockchain expert ZachXBT observed that the transactions exhibited suspicious patterns. Experts indicate that a portion of the funds were routed through platforms utilizing Binance for liquidity, although initial reports suggested the funds were deposited directly onto Binance.
These assets originated from a wallet seized by the US Department of Justice in 2022 during an investigation into the 2016 Bitfinex hacking incident. In that breach, approximately 120,000 BTC, valued at $72 million at the time, were stolen from the exchange. By the time of the government’s seizure, their value had escalated to $3.6 billion.
An hour after the initial recovery, a new wave of transfers commenced. A small, exploratory transaction involving ETH preceded substantial transfers of $6.1 million and $11.6 million into aUSDC, a stablecoin on the Aave platform. The wallet also contained a variety of other cryptocurrencies, including USDC, TRUMP, MTV, USDT, and WATER.
