Compass Investments

Wallets associated with the U.S. government transferred 3,940.7 BTC and 30,007 ETHworth approximately $297 millionto Coinbase Prime.

The transfer of funds does not necessarily indicate a sale, as Coinbase Prime provides both custody and trading services to the U.S. Marshals Service.

Different strategies apply to Bitcoin and Ether: reserve BTC is subject to a policy prohibiting its sale, whereas non-Bitcoin assets may be managed or sold off under expanded legal authority.

Liquidation would require additional confirmation through official records of asset disposition, identifiable settlement transactions, or a documented reduction in the governments ownership stake.

Transferring assets to an exchange typically increases the likelihood of a sale, but Coinbase Primes role as a government custodian makes this step less straightforward than a standard exchange deposit.

In 2024, the U.S. Marshals Service selected Coinbase Prime to store and trade its large digital assets. Thus, the platform serves as both an institutional custodian and a cryptocurrency trading venue under federal oversight.

Transactions conducted on July 13 may indicate preparations for a sale, but they could also reflect the consolidation of holdings, wallet reorganization, the completion of forfeiture proceedings, or the transfer of assets to the U.S. Marshals Services established management infrastructure.

The route taken by the bitcoins through new intermediate wallets does not provide a clear answer to this question. Fresh addresses are typically used when agencies reorganize storage or separate assets associated with different court cases. A direct ETH deposit similarly confirms the transfer of funds rather than a completed transaction.

Arkham wallet tags link the transferred funds to federal cases involving Ryan Farache, to assets associated with BTC-e, and with cryptocurrency seized from a wallet controlled by Brian Kruson.

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The Arkham Intelligence transaction log, which contains various cryptocurrency transactions involving addresses flagged by the U.S. government and addresses used to fund Coinbase Prime accounts; transaction datesapproximately 1216 hours prior to July 14, 2026.

Arkham Intelligences timeline showing recent significant transfers in Bitcoin and Ether linked to wallet addresses flagged by the U.S. government.

Farache, known online as XANAXMAN, was convicted of drug trafficking on the dark web. According to the Department of Justice, in February 2021, federal agents seized 2,874.90419597 BTC linked to his proceeds from drug sales, and in May 2021, another 58.742155166 BTC.

Another portion was linked to BTC-ea now-defunct cryptocurrency exchange whose infrastructure was widely used to launder proceeds from criminal activity. In 2024, the exchanges former operator, Alexander Vinnik, pleaded guilty to conspiracy to launder money. In official case documents, BTC-e is described as one of the main channels for moving funds linked to extortion, hacking attacks, identity theft, drug trafficking, and other illegal activities.

The Ether was confiscated as part of a separate case related to the drug trade. The Ministry of Justices civil complaint states that law enforcement seized 30,000 ETH, approximately six additional ETH created as a result of Ethereum hard forks, as well as a number of other digital assets from a wallet controlled by Kryuson on behalf of convicted drug traffickers Christopher Castelluzzo and Luke Atwell.

At the time of the seizure in July 2022, the government estimated the value of these assets at approximately $31 million. By the time the civil forfeiture lawsuit was filed in November 2023, the total value of the cryptocurrency portfolio had exceeded $54 million.

The most significant difference in policy is that the March 2025 executive order does not treat all cryptocurrencies in the governments possession equally.”,”detected_source_language”:”RU