US Govt Moves $90M In Bitcoin, ETH From Estonian Scammers

In the early US hours, Arkham Intelligence reported that the United States government had transferred over $90 million worth of Bitcoin and Ethereum, previously seized from two Estonian nationals involved in a vast cryptocurrency fraud and money laundering scheme. This move captured the attention of the cryptocurrency community, just days after the transfer of approximately $2 billion in Bitcoin related to the infamous Silk Road marketplace.

Arkham Intel, utilizing its advanced tracking technology, noted that just two hours ago, the US government executed multiple transactions involving the seized digital assets. These included the transfer of 0.69 BTC, worth approximately $45.750, and another 374 BTC, valued at around $24.80 million, to a newly identified Bitcoin address (3GoRwyQvAJhX3conyuq355JiBD9FyfXAQe).

Additionally, 218.5 BTC, worth $14.49 million, were also moved to the same address, along with 4.567K ETH, equating to $15.21 million. Just minutes prior to press time,  another 0.0001 BTC and 0.5 BTC were moved to another new address (3LNW8R3AfDQgVCB9sQPwChyG47ktSjh3f3).

Both the Bitcoin and Ethereum addresses are new and previously unknown to Arkham, suggesting a strategic consolidation rather than an immediate liquidation of assets.

The seized funds originate from Sergei Potapenko and Ivan Turõgin, two Estonians arrested in their home country in October 2022 following an 18-count indictment by a grand jury in the Western District of Washington.

The duo was implicated in orchestrating a $575 million cryptocurrency fraud through their ventures, HashFlare, a cryptocurrency mining service, and Polybius Bank, a virtual currency bank that never existed nor returned promised dividends to investors. Their elaborate scheme not only involved fraudulent equipment rental contracts but also utilized shell companies for laundering the proceeds to acquire luxury real estate and vehicles.

In September last year, the Estonian government approved the extradition of Potapenko and Turõgin to the United States. Estonian Prime Minister Kaja Kallas revealed at that time that the decision had been made at the government level.

Today’s transactions by the US government follow a precedent set by the movement of Silk Road’s bitcoins. Notably, 2,000 BTC from the Silk Road haul were transferred to a Coinbase wallet, while the remainder were relocated to a wallet identified by Arkham as belonging to the government.

This pattern indicates a systematic approach by the US government to handling seized digital assets, focusing on consolidation before any potential future actions.

As the crypto market observed these developments, the price of Bitcoin has remained stable, hovering above $66,000. The significant amount of funds involved and the government’s handling of such assets continue to be a point of interest for both investors and observers within the crypto space.

Contrary to common belief, it’s important to note that the US govt normally doesn’t sell Bitcoin or Ether at the open market. “The Silk Road US GOV coins FUD is literally just FUD. The government doesn’t slam market sell on public orderbooks. If it’s getting sold it either already or will be sold OTC/auction,” crypto analyst Byzantine General noted two days ago.

At press time, BTC traded at $66,311.

Featured image created with DALL·E, chart from TradingView.com

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