The U.S. government transferred $288 million in seized Bitcoin and Ethereum to Coinbase Prime on Monday, according to on-chain analytics firm Arkham. The move has sparked speculation about a potential sale, though Coinbase Prime serves as the government's custodian and the deposit does not confirm an imminent sell-off.
The transfers, executed over roughly half a day, included approximately 3,800 Bitcoin (BTC) worth $235 million and about 30,000 Ethereum (ETH) valued at $53 million. The Bitcoin originated from funds seized from Ryan Farace, a dark-web dealer known as "Xanaxman," and the defunct exchange BTC-e. These funds were routed through intermediary wallets before reaching Coinbase Prime. The Ethereum came from a $54 million money-laundering case involving Oracle employee Brian Krewson and was sent directly to a deposit address.
Custody or Cashing Out?
Large holders typically keep assets in cold storage, so any movement draws attention. The government has not publicly explained the transfers, leading some market participants to view them as a potential precursor to a sale. Tim Sun, Senior Researcher at crypto exchange HashKey, noted that the U.S. Marshals Service selected Coinbase Prime in 2024 to custody and trade forfeited digital assets. The transfers could simply be for managed custody or consolidation, rather than a sale.
The Never-Sell Rule
President Donald Trump's March 2025 executive order created a Strategic Bitcoin Reserve and declared that Bitcoin deposited into it "shall not be sold." However, only Bitcoin that has completed the final forfeiture process can enter the reserve and be shielded from sale. The coins moved on Monday come from active criminal cases and are handled separately from the reserve. Ethereum falls under a separate Digital Asset Stockpile, giving the government greater flexibility to dispose of it. The reserve remains unsettled, with legislation to codify it stalled in Congress and ongoing disputes over control between the Treasury and Commerce departments. Arkham tracks U.S. government wallets holding $20.6 billion in crypto, including 324,552 BTC, making the $288 million transfer a relatively small amount.