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Hackers appear to have stolen about $20 million worth of stablecoins and Ethereum from wallets owned by the U.S. government. The funds were tied to the Bitfinex hack in 2016 and had not been moved for more than eight months, according to analysis firm Arkham Intelligence.
US government wallet compromised
On Thursday, tokens tied to U.S. authorities were removed from decentralized lending platform Aave and moved to a five-day-old wallet address that Arcam analysts described as a possible theft.
A prominent on-chain detective revealed that $1.25 million worth of Tether’s USDT stablecoin and $5.5 million worth of Circle’s USD coin (USDC) were withdrawn from Aave. These funds were transferred to wallets starting with “0x348” along with $446,000 worth of Ether and $13.7 million worth of USDC. Arkham said this is the first time in eight months that crypto assets have been tampered with.
Detectives noted that the bad actors then moved the tokens to multiple non-custodial applications in an apparent attempt to launder the funds. “We believe the attackers began laundering proceeds through suspicious addresses linked to money laundering services.”
𝗨𝗣𝗗𝗔𝗧𝗘: 𝗨𝗦𝗚𝗼𝘃𝗲𝗿𝗻𝗺𝗲𝗻𝘁𝗚𝗼𝘃𝗲𝗿𝗻𝗺𝗲𝗻𝘁𝗹𝗶 𝗻𝗸𝗲𝗱𝗮𝗱𝗱𝗿𝗲𝘀𝘀𝘁𝗼𝗯𝗲𝗲𝗻𝗳𝗼𝗿$ $𝟮𝟬𝗠.
$20 million in USDC, USDT, USDC, and ETH were suspiciously moved from address 0xc9E6E51C7dA9FF1198fdC5b3369EfeDA9b19C34c linked to USG… pic.twitter.com/UXn1atE1Wx
— Arkham (@ArkhamIntel) October 24, 2024
This was a similar point made by pseudonymous crypto detective ZachXBT, who commented on X that its activities appear to be “nefarious.” The funds were likely stolen, rather than simply transferred by federal marshals, experts added.
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At the time of writing, the government-controlled wallet was virtually empty, containing only about $126 worth of Donald Trump-themed meme coins. Meanwhile, approximately $13 million in crypto assets is currently stored in the suspect’s wallet.
The suspect has not yet been identified, and it is unclear how the U.S. government, which owns dozens of cryptocurrencies worth $13 billion, was compromised. What is clear is the fact that hackers misused funds confiscated by the US government in the 2016 Bitfinex hack.
Massive Bitfinex hack of 2016
Ilya Lichtenstein and his wife Heather Morgan hacked the offshore cryptocurrency exchange Bitfinex in 2016 and stole 120,000 BTC, worth about $70 million at the time. However, the value of the assets had ballooned to $4.2 billion by the time the couple was arrested in 2022, making it the largest seizure to date.
Mr. Lichtenstein and Mr. Morgan face charges of money laundering and conspiracy to defraud the U.S. government, and agreed to a plea deal with U.S. authorities in July 2023 in exchange for reduced sentences.
If it turns out that the US government was indeed hacked, it would be the latest startling twist in a saga that has been unfolding since 2016.
