US Government Shuffles $90 Million in Seized Cryptocurrency from Estonian Fraudsters


In the pre-dawn hours stateside, the whisperings among the cryptocurrency community amplified into astonished murmurings as Arkham Intelligence, equipped with their sophisticated tracking technology, released reports of an audacious move by the U.S. government. It appeared that Uncle Sam had transferred a staggering $90 million in Bitcoin and Ethereum. These digital assets had been seized from two convicted Estonian fraudsters, previously implicated in a dizzying cryptofraud and money laundering operation of vast proportions.

This unexpected government maneuver occurred a mere few days after an equivalent move involving another gargantuan haul of cryptocurrency, a total of $2 billion, associated with the notorious Silk Road online marketplace. The Silk Road was infamous for facilitating illicit trades on the dark web and frequently used cryptocurrencies for transactions.

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According to Arkham Intelligence, the U.S. authorities had executed a series of transactions not long ago that involved these confiscated digital currencies. Essential figures included the transfer of 0.69 BTC, amounting to roughly $45,750, and a separate transfer of 374 BTC, priced at around $24.80 million. Both were relocated to an unidentified Bitcoin address.

Furthermore, an additional 218.5 BTC, amounting to $14.49 million, along with 4.567K ETH, equating to $15.21 million, were also translocated to the same address. Interestingly, the shifting of another 0.0001 BTC and 0.5 BTC to an alternate address occurred just before the breaking news.

For Arkham Intelligence, these Bitcoin and Ethereum addresses were uncharted territories. Abstract in the constantly changing digital constellation, their newfound activity hinted not at the hasty trade-off of assets, but rather a more meticulous and strategic consolidation.

The confiscated cryptocurrency hails from the ill-gotten gains seized from Sergei Potapenko and Ivan Turõgin, two Estonians ensnared in their country last October. They were faced with an 18-count indictment issued by a grand jury from the Western District of Washington.

The clever, yet nefarious duo, had reportedly masterminded an immense $575 million cryptocurrency swindle through their ventures. The operations included HashFlare, the supposed cryptocurrency mining service, and Polybius Bank, a fictitious digital bank that never returned promised dividends to investors. Their comprehensive scheme went beyond fraudulent equipment rental contracts. Through shell companies, they laundered their profits to afford high-end real estate and luxury vehicles.

Following their arrest last September, the Estonian government had granted their extradition to the U.S., a decision revealed by the Estonian Prime Minister, Kaja Kallas, to have been made at the government level.

The latest movement of the seized cryptocurrency mirrors a similar precedent set by the Silk Road’s Bitcoin transfer. Specifically, 2,000 BTC from the Silk Road haul were relocated to a Coinbase wallet, with the rest finding a home in a government-owned wallet, as identified by Arkham.

Despite the scale and novelty of these transactions, the recorded trade price of Bitcoin remains consistent, hovering persistently above the $66,000 threshold. However, the mechanisms through which the government engages with these large-scale digital assets continue to pique the interest and gaze of both investors and casual onlookers within the rapidly growing market of cryptocurrency.

Challenging a common misconception, it is noteworthy to point out that the U.S. government does not traditionally offload Bitcoin or Ether on an open market. As Byzantine General, a respected cryptocurrency analyst, noted recently, the U.S. government typically transacts outside public order books. To quote, “If it’s getting sold, it either already has or will be sold OTC/auction.”

At the time of this report, Bitcoin is trading steadily on the market at $66,311, unaffected by these intriguing revelations.