$20 Million in U.S. Government Crypto Allegedly Stolen: Arkham and ZachXBT Report

A $20 Million Crypto Heist Targets U.S. Government Wallets

Crypto analysts at Arkham Intelligence and independent sleuth ZachXBT have reported a potential theft involving roughly $20 million in cryptocurrency from U.S. government wallets. Tracked through onchain movements, the missing assets include Ethereum (ETH) and stablecoins that had been dormant for over eight months on the decentralized lending platform Aave.

Unusual Movements Signal Potential Theft

The incident began on Thursday around 2:00 p.m. ET, when previously immobile funds were withdrawn from Aave. Arkham Intelligence shared on X (formerly Twitter) that the suspect wallet, “0xc9E,” received crypto funds originally seized by the U.S. government in connection with the infamous Bitfinex hack. Arkham noted that these assets came from nine separate addresses linked to previous federal seizures, including address “0xE2F699AB099e97Db1CF0b13993c31C7ee42FB2ac,” which is specifically mentioned in court documents.

Breakdown of Stolen Assets

The stolen assets include nearly $14 million in AUSDC, $5.4 million in USDC, $1.1 million in USDT, and around $500,000 in ETH. This unauthorized transfer raises questions about how the suspect gained access, as the U.S. government holds over $14 billion across a wide range of digital assets. The onchain activity suggests a possible malicious breach of federal wallets.

Funds Allegedly Laundered via Non-Custodial Services

Shortly after the initial withdrawal, the suspected account began moving the funds into various non-custodial platforms, likely to obscure the trail. “The attacker has already started laundering the assets through suspicious addresses linked to known money laundering services,” Arkham Intelligence confirmed. Crypto analyst ZachXBT added that the U.S. government is unlikely to use services like Switchain or N.Exchange, suggesting theft rather than an official asset transfer.

Tracking the Suspect Wallet

As of now, the suspect’s wallet holds an estimated $13 million. The stolen funds are being gradually distributed to other addresses, such as “0x15D0a” and “0xBf6F7,” which currently store about $5.5 million and $1.4 million in ETH, respectively. These moves, common in crypto laundering tactics, indicate the suspected hacker is spreading the assets across multiple wallets to evade detection.

A Reminder of the Crypto World’s Vulnerabilities

Crypto theft is far from rare; data from blockchain security firm Rekt shows that nearly $81 billion in digital assets has been lost to various hacks and exploits since 2011. However, the Bitfinex hack stands as a unique incident in crypto history. Originally worth $65 million, the stolen assets’ value surged to over $4 billion by the time they were seized from notorious couple Heather “Razzlekham” Morgan and Ilya Lichtenstein. The U.S. government’s control over these assets remains contentious, though they have proposed returning the recovered tokens to Bitfinex.

An Unfolding Investigation

If the breach did, in fact, involve the U.S. Marshals Service or another government agency, it would mark another dramatic twist in a case ongoing since 2016. As the investigation progresses, crypto enthusiasts and security experts alike are closely monitoring the story. Hours after the hack was reported, a crypto user named typicaldoomer.eth sent the suspected hacker a meme token called NOCHILL—perhaps a fitting reminder of the bold nature of this theft in the crypto world.

This suspected theft of government-controlled assets underscores the pressing need for stringent security protocols in digital asset management, particularly for significant holdings in the cryptocurrency space.