Key Points
- The US government has transferred $11.75 million worth of seized Ethereum to an anonymous address.
- The Ethereum was confiscated from Estonian nationals involved in a cryptocurrency Ponzi scheme.
The US government has been observed transferring a large sum of Ethereum (ETH) to an undisclosed address.
This was reported by blockchain intelligence platform Arkham Intelligence, stating that an address linked to the US government moved 3,375 Ethereum, valued at approximately $11.75 million at the time of the transaction.
Origins of the Seized Ethereum
The Ethereum was transferred to the address “0x5a…1871” at 16:34 UTC+8 on a Monday.
The cryptocurrency was seized from Estonian entrepreneurs Sergei Potapenko and Ivan Turõgin, who were implicated in a large-scale cryptocurrency Ponzi scheme under the guise of a cryptocurrency mining service known as HashFlare.
Potapenko and Turogin allegedly tricked investors into investing their money by promising substantial returns through their crypto ventures.
Their illicit activities eventually attracted the attention of law enforcement, leading to their arrest in November 2022.
They were charged with conspiracy to commit wire fraud, 16 counts of wire fraud, and one count of conspiracy to commit money laundering, with each charge carrying a maximum penalty of 20 years in prison.
Like many other crypto scam cases, the US government confiscated their assets, which have been in its custody since.
Speculations Surrounding the US Government’s Crypto Transfers
The recent Ethereum transfer is just one of many transactions the US government has conducted in recent weeks.
Arkham Intelligence reported another transfer by a US government address that previously held seized funds, moving 11.84 Bitcoin to a new address.
While this transaction seems insignificant, it is speculated to be a test before a larger transfer.
The recent $11 million Ethereum transfer supports these speculations.
The frequency of these transfers suggests a potential selloff that could further affect crypto prices, particularly during a period of market volatility.
CryptoQuant CEO Ki Young Ju previously tried to alleviate concerns about the US government’s Bitcoin sale, suggesting that the transfers are unlikely to significantly impact the market due to the receiving exchanges’ ability to handle sufficient liquidity.
Conversely, Adam Back, co-founder and CEO of Blockstream, believes that such sales could be beneficial for long-term Bitcoin buyers, commonly known as “HODLers”.
