U.S. Government Moves $1B in Bitcoin as Senate Probe Targets Tether Ties

Government-linked wallets move 12,267 BTC

According to blockchain intelligence firm Arkham, wallets associated with the U.S. government sent 12,267 BTC, worth about $1.01 billion at current prices, out of an address that holds coins seized in the 2016 Bitfinex hack. The Bitcoin went to a new, unlabeled address, and a second transaction went to a different one. Arkham recorded no deposit to any exchange.

Why a transfer is not the same as a sale

Movements from government wallets routinely spark fears of selling pressure, but the pattern matters. A transfer to fresh addresses with no exchange deposit looks more like an internal reshuffle than an order to sell.

The day before, roughly 3,200 BTC (about $264 million) and $119 million in USDT reached deposit addresses at Coinbase Prime. Arkham traced those funds to wallets tied to the FTX/Alameda and Bitfinex seizures. Coinbase Prime also provides custody, so a deposit there does not by itself signal a sale. Earlier in the week, more than $100 million in BTC and BNB moved in a similar way, and in July about $288 million in seized Bitcoin and Ether was routed to the same venue through intermediary wallets.

The policy backdrop points the same direction. A March 2025 executive order directed that forfeited Bitcoin be placed in a Strategic Bitcoin Reserve rather than sold, and Arkham estimates the government still holds about $25.5 billion in crypto. No disposal has been confirmed.

Senate scrutiny turns to Tether and Cantor Fitzgerald

Separately, Senator Richard Blumenthal of Connecticut, the top Democrat on the Senate Permanent Subcommittee on Investigations, sent a letter dated October 8 to Brandon Lutnick, who leads Cantor Fitzgerald. Brandon Lutnick is the son of Commerce Secretary Howard Lutnick, who handed the firm to him before joining the Trump administration. Cantor holds and manages Tether's reserves in the United States.

The letter argues that Cantor has profited heavily from the relationship. It says the firm's roughly 5% stake in Tether has grown in value from about $600 million to an estimated $10 billion, on top of the tens of millions of dollars Cantor collects each year for holding Tether's assets. It also contends that most of Tether's assets sit in the United States under Cantor's custody, even though the stablecoin issuer says it operates from El Salvador.

What the senator wants to know

Blumenthal asked Cantor to preserve all relevant records and to respond by October 23, 2026. His questions cover when and how the partnership began, how much revenue it has generated for the firm and for the Lutnick family, whether Tether is regularly audited by an independent firm, and how Cantor monitors Tether's compliance with sanctions and anti-money-laundering rules. He also asks for details of the custody arrangement and for the terms under which Howard Lutnick gave up his stake in Cantor, including any Tether loan that helped transfer it to his children.

A further request asks what steps Cantor has taken to examine allegations that USDT has been used for illicit finance, including through Iran's shadow banking network and for Russian sanctions evasion, along with any communications with the President's Council of Advisors on Digital Assets.

The inquiry builds on a September 28 report from the subcommittee's Democratic minority describing how Iran-linked wallets rely on USDT, and on an April letter from Senators Elizabeth Warren and Ron Wyden about a Tether loan to a trust for Howard Lutnick's children. Neither Cantor Fitzgerald nor Tether had responded to requests for comment when the letter was first reported.

Important context: allegations, not findings

A minority-led inquiry cannot compel testimony or documents, and the claims in the letter are allegations rather than established findings. That dynamic could change if Democrats win a Senate majority in November's midterm elections, which prediction markets currently rate as more likely than not. Until then, the practical effect is political pressure and a paper trail.

Market backdrop: Bitcoin near $82,000

Crypto prices were soft as these stories broke. Bitcoin dipped below $81,000 to its lowest level in almost three weeks before recovering toward $82,000, and Ether traded near $2,500. The Crypto Fear & Greed Index eased to 59 from 64, still in "Greed" territory. CoinGecko data put total crypto market capitalization at about $2.86 trillion, down roughly 2.5% over 24 hours.

What to watch next

Three things will shape how these stories develop. First, whether the newly funded government-linked addresses send any coins to exchanges, which would be the clearest sign of a sale. Second, whether Cantor Fitzgerald and Tether answer by the October 23 deadline, and how publicly they do so. Third, how the November midterms change the balance of power on the committees that oversee stablecoins and digital-asset market structure.