17,000 Bitcoin Moved From U.S.-Linked Wallets: Sale or Something Else?

After reviewing approximately 17.733 BTC transferred from wallets linked to the U.S. government to Coinbase Prime, K33 Research concluded that most of the movements may have been related to custody arrangements rather than sales.

According to a K33 Research analysis cited by Wu Blockchain, following the transfers in early October, the amount of Bitcoin in wallets labeled as government-owned fell from 324.527 BTC to 306.795 BTC. The total amount transferred may have reached 21.500 BTC when addresses suspected of being linked to the government but not yet labeled were also included.

Why were the Bitcoin sent to Coinbase Prime?

12.267 BTC of the transferred assets were linked to the Bitfinex hack. K33 pointed to Coinbase Prime’s role in providing custody services to the U.S. Marshals Service and the ongoing ownership claims process for the Bitfinex assets.

In light of these two factors, the research firm interpreted most of the transfers as movements related to custody arrangements rather than preparations for a sale. This offered an explanation other than a sale for the large transfer to the exchange’s institutional service.

About 1.200 BTC could be sold

The analysis considered about 1.200 BTC linked to the FTX and HashFlare cases separately. According to K33, these assets could be sold to provide cash compensation to victims.

While the possibility of a sale was raised for this portion, K33’s assessment does not indicate that a sale has been completed or that a sale schedule has been finalized.