US Government Crypto Wallet Receives $19.3 Million After Hack, Hacker Might Be Making a U-turn

A crypto wallet controlled by the United States government has received $19.3 million in digital assets after a previous hack.

A crypto wallet controlled by the United States government has received $19.3 million in digital assets following a hack that saw $20 million in assets being drained from the wallet on Oct 24.

The wallet, which was flagged by several crypto enthusiasts, has now seen the bulk of the lost funds being returned to it.

According to blockchain analytics firm Arkham Intelligence on X (formerly Twitter), the US government-controlled wallet received $19.3 million of the previously drained funds less than 24 hours after the initial incident.

On-chain data showed that the returned funds consisted of stablecoin USDC and Ethereum.

“The US Government’s address has just received $19.3M back following yesterday’s reported hack, less than 24 hours after the initial address breach. 88% of the compromised USD value has now been recovered.”

Following this, part of the assets began flowing to a new wallet, with total outflows hitting $6.1 million, including an Aave version that accrues interest. More transfers in USDC followed as crypto enthusiasts flagged outflows.

According to several members of the crypto community, these transfers might be test flows that usually precede main transactions.

This was seen in July when the German government carried out test transfers before making a huge sale of its BTC holdings.

The German government’s Bitcoin sale brought down sentiments in the market, leading to the price of the asset dropping to less than $55k. This selling pressure saw several retail investors being shaken out of the market, with bulls buying up their positions.

A cross-section of the community has likened present transfers to a larger outflow.

On Oct 24, a hacker drained $20 million from the US-controlled wallet in a transaction that was flagged by blockchain sleuth ZachXBT. The funds seized by the U.S. government were part of assets drained from the Bitfinex hack in 2016. Around 120,000 BTC was lost in the incident, with law enforcement making seizures afterward.

According to Arkham Intelligence on the Oct 24 heist, the funds were being laundered after being moved to the new wallet.

“The funds were moved to wallet 0x348 which has begun selling the funds to ETH. We believe the attacker has already begun laundering the proceeds through suspicious addresses linked to a money laundering service.”