By
Leon Okwatch
July 3rd, 2024
The recent ETH transfer is only one of the numerous transactions that the US government has processed in the last few weeks.
The United States government was seen moving some Ethereum (ETH) to an unknown address earlier today. According to blockchain intelligence platform Arkham Intelligence, “0x05…e049”, an address associated with the US government transferred 3,375 Ethereum, worth about $11.75 million at the time the transaction was made.
Notably, a unit of ETH is now trading at $3,477.20 after a 2.55% increase in the last 24 hours.
Ethereum Loot Seized from Estonian Nationals
The ETH transfer was made to “0x5a…1871” at 16:34 UTC+8 on Monday. The US address holds the crypto assets that were confiscated from Estonian crypto entrepreneurs Sergei Potapenko and Ivan Turõgin. The two Estonian nationals were involved in a massive multi-faceted cryptocurrency Ponzi scheme in the form of a purported cryptocurrency mining service HashFlare.
Potapenko and Turogin allegedly deceived investors into parting with their funds by promising high returns through their crypto operations and related ventures.
Their illegal activities later caught the attention of the authorities and led to their arrest in November 2022. They faced an 18-count indictment filed in the Western District of Washington which includes a conspiracy to commit wire fraud, 16 counts of wire fraud, and one count of conspiracy to commit money laundering. Each of the entrepreneurs faced a maximum penalty of 20 years in prison on each count.
As with many other crypto scam cases, the United States government seized their loot and has since kept it in its custody. Before this seizure, the US government’s Bitcoin (BTC) holdings had amounted to a total of 216.788 BTC.
US Government Crypto Transfers Sparks Speculations of a Selloff
The recent ETH transfer is only one of the numerous transactions that the US government has processed in the last few weeks. Arkham Intelligence reported that another US government address that used to hold the seized funds, transferred 11.84 BTC to a new address “3KHnTq…muuso9”. The transfer was valued at $726,000 at the time.
While the transaction looks minor, it is speculated to be a preliminary test preceding a larger transfer. The new transfer of $11 million worth of Ethereum underscores speculators’ position. The frequency of these transfers suggests an imminent selloff that could further depress crypto prices. This bearish speculation comes as the transfers coincide with when the market is experiencing price volatility.
CryptoQuant CEO Ki Young Ju once attempted to alleviate fears associated with the US government’s Bitcoin sale. In his opinion, the transfers are not likely to impact on the market significantly due to the capacity of the receiving exchanges to handle enough liquidity.
On the other hand, Adam Back, co-founder and CEO of Blockstream strongly believes that such sales could potentially be beneficial for long-term Bitcoin buyers, widely known as “HODLers”.