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US Government Transfers 264 Bitcoin Worth $23 Million to Bitfinex as Restitution
On October 6, 2026, the US government transferred approximately 264.8 Bitcoin, valued at around $23 million, to Coinbase from a government wallet associated with the 2016 Bitfinex hack. This transfer is part of a court-ordered restitution to the Bitfinex exchange, rather than a market sale. The transaction follows a federal court ruling in 2025 that mandated the return of the seized Bitcoin in-kind to Bitfinex, rather than converting it to cash.
This recent transfer is not the first from this Bitcoin stash; in April 2026, the government sent about 8.2 BTC, worth approximately $606,000, to a Coinbase Prime deposit address. These transfers have been characterized as custody-related actions by the US Marshals Service, indicating administrative processes rather than liquidation of assets. The 2016 hack resulted in the theft of approximately 119,754 BTC, making it one of the largest thefts in cryptocurrency history.
Bitfinex plans to utilize the returned Bitcoin to redeem Recovery Right Tokens issued to users affected by the 2016 breach. Additionally, the exchange intends to allocate at least 80% of any remaining net proceeds from the recovered assets towards repurchasing and burning its UNUS SED LEO token. This commitment represents a significant pledge to LEO holders and reflects Bitfinex's strategy to address the losses incurred by its users during the hack.
As of mid-2026, the US government holds over 328,000 BTC, and the recent transfer represents a small fraction of this total. The court ruling favoring in-kind restitution could set a precedent for how future cryptocurrency seizures are managed, particularly for victims who prefer the return of their assets over monetary compensation.
Source: KLEA News