Amid the ongoing cryptocurrency market recovery, a wallet address linked to the US Government that holds seized funds has been compromised by hackers. On October 25, 2024, the blockchain intelligence firm Arkham Intelligence made a post on X (Previously Twitter) that the US government’s crypto address had been breached, resulting in a loss of $20 million worth of assets.
Source: X (Previously Twitter) US Government $20 Million Crypto Fund Stolen
According to the data Arkham has shared, the compromised $20 million held in the address was originally seized from hackers involved in the 2016 Bitfinex hack. These funds primarily consisted of stablecoins like USDT, USDC, aUSD, and ETH. They were transferred from the U.S. government-linked wallet address “0xc9E” to the hacker’s address “0x3486.”
In 2016, hackers stole nearly $4.5 billion worth of cryptocurrencies. The U.S. government later recovered most of these funds and transferred them to the wallet address “0xc9E,” which was compromised today.
Hackers Begin Laundering Stolen Funds
Additionally, the hackers have begun laundering the funds by converting them into Ethereum (ETH), which makes it harder to trace. In addition to this, Arkham in his post on X noted, “We believe the attacker has already begun laundering the proceeds through suspicious addresses linked to a money laundering service.”
However, on October 9, 2024, the U.S. government announced that Bitfinex was the sole victim of the 2016 attack and was eligible for compensation of 120,000 BTC from the seized funds. With the recent compromise, concerns have arisen about whether Bitfinex will receive the funds or if the authorities will need more time to resolve the issue.
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