U.S. Government Moves $1 Billion in Seized Bitcoin as Senate Probes Tether's Custodian

Government Wallet Shifts 12,267 BTC

At about 9:33 a.m. Eastern, a wallet that blockchain analytics firm Arkham tags as holding coins seized in the 2016 Bitfinex hack sent 12,267 BTC, worth roughly $1.01 billion, to new and unlabeled addresses. A tiny fraction of a bitcoin went to a second wallet.

Crucially, no deposit to a trading venue was recorded. That pattern points more toward internal wallet reshuffling than a sale, although the destination wallets have no public label, so outsiders cannot say who controls them.

The transfer followed heavier activity a day earlier, when government-linked wallets sent about $119 million in USDT and several hundred million dollars’ worth of bitcoin to Coinbase Prime. That platform also offers custody, so such deposits do not automatically signal selling. A March 2025 executive order directs forfeited bitcoin into a Strategic Bitcoin Reserve that is not meant to be sold, and Arkham estimates the government still holds roughly $25 billion in the asset.

Senate Scrutiny of Tether’s U.S. Custodian

The same day, Senator Richard Blumenthal, the ranking Democrat on the Senate Permanent Subcommittee on Investigations, sent a letter to Cantor Fitzgerald chairman Brandon Lutnick. The letter asks how the bank monitors Tether’s compliance with banking and sanctions rules and requests communications involving Howard Lutnick, now U.S. Commerce Secretary, about the stablecoin issuer.

Cantor acquired rights to a 5% stake in Tether in 2024 and reportedly custodies tens of billions of dollars in the Treasury bill reserves that back USDT. Blumenthal’s inquiry follows a report from Democratic investigators last month alleging that USDT has become a tool for Iran’s shadow banking network.

Cantor has until October 23 to respond. The letter does not establish that either company broke the law, and neither firm responded immediately to requests for comment.

Why the Two Stories Belong Together

The common thread is custody and transparency. In one case, the public is watching a government treasury move coins with little explanation. In the other, lawmakers are testing whether a key link in the stablecoin supply chain has adequate safeguards against sanctions evasion and illicit finance.

Blumenthal has framed the Cantor relationship as relevant to Congress’s ongoing work on digital-asset regulation, which suggests the Tether question may shape how stablecoin rules are debated this autumn. Bitcoin itself traded in the low $80,000s as the news broke, so neither story has yet produced a clear market shock.

What to Watch Next

Three markers will show where this goes: whether the relocated coins ever reach an exchange, whether Treasury or the Justice Department clarifies the purpose of the transfers, and what Cantor tells the Senate subcommittee by the October 23 deadline.

This article is for informational purposes only and is not investment advice.