The US government transferred 264.863 BTC, valued at roughly $22.87 million, to Coinbase Prime on October 6, 2026, in a court-ordered in-kind restitution flow tied to the 2016 Bitfinex hack. The transfer, traced on-chain to a wallet long associated with seized assets, executed under a 2025 federal court ruling that required the recovered Bitcoin be returned to Bitfinex rather than liquidated.

Why this isn't a sale

Trading data shows no matching liquidation through Coinbase's order books following the deposit. Coinbase Prime, the exchange's institutional arm, services large clients and routinely processes administrative deposits. Movement of seized Bitcoin typically reflects US Marshals Service administrative work rather than new supply entering the market.

Earlier in April 2026, smaller transactions out of the same wallet had already moved approximately 8.2 BTC, worth about $606,000, to a Coinbase Prime deposit address.

What the court ordered

The 2025 ruling represented a notable departure from the federal government's standing practice of converting seized crypto to cash through Treasury auctions. The court instead directed that the Bitcoin be returned to Bitfinex in kind, preserving the assets for distribution to victims and stakeholders rather than converting them into fiat.

Where Bitfinex plans to send the coins

Bitfinex has outlined a two-track plan for the recovered assets. The exchange reportedly intends to use a portion of the recovered Bitcoin to redeem Recovery Right Tokens, instruments issued to users who lost funds in the original 2016 breach. Beyond that, Bitfinex has committed to allocate at least 80% of any remaining net proceeds toward repurchasing and burning its UNUS SED LEO token.

The buyback pledge is the most direct consequence for LEO holders. Any systematic liquidation of the holdings will funnel proceeds back into token repurchases, contracting float over time.

What the convictions look like in context

The hack remains one of the largest thefts in the industry's history. Attackers stole roughly 119,754 BTC from Bitfinex in 2016. Federal authorities recovered approximately 94,636 BTC in 2022 following the arrest of Ilya Lichtenstein and Heather Morgan, who had been laundering the proceeds through a complex on-chain maze. Lichtenstein received a five-year prison sentence. Morgan was sentenced to 18 months for her role.

Why this matters for victims and for future seizures

For holders of Recovery Right Tokens, the in-kind return provides Bitfinex the balance sheet to honor redemptions nearly a decade overdue. The structure of the 2025 ruling also establishes a precedent that could shape how future crypto seizures are administered, particularly in cases where victims might prefer their original assets over a cash settlement.

The October transfer amounts to well under 1% of an aggregate federal Bitcoin balance that exceeded 328,000 BTC in mid-2026 across various seized-asset pools. Whether additional tranches move depends on administrative scheduling at the Marshals Service and on Bitfinex's redemption timetable, and the 2025 ruling tilts the trajectory toward further in-kind returns rather than liquidation auctions.