Bitcoin from the Farace and BTC-e wallets was laundered through fresh intermediary addresses before landing on the exchange, sixteen months after Trump's executive order told federal agencies not to sell.
Wallets tied to the US government transferred roughly 3,800 bitcoin and 30,007 ether, worth about $288 million combined, to Coinbase Prime on Monday, according to onchain analytics firm Arkham Intelligence. The bitcoin took a detour through fresh intermediary addresses before landing on the exchange. The ether went direct.
The optics are awkward. Sixteen months ago President Donald Trump signed an executive order establishing a Strategic Bitcoin Reserve and instructed federal agencies not to sell the seized coins they held. Monday's movements do not prove a sale is coming; Coinbase Prime handles custody, financing and staging as well as execution. But exchange deposits are typically the last stop before a disposal or a swap into stablecoins, and cold storage is where large government hoards usually sit.
The Farace wallet sent 2,875 BTC worth around $178 million to a newly created address, which forwarded the full amount to a Coinbase Prime deposit wallet minutes later. Ryan Farace was sentenced to 54 months in 2023 for selling counterfeit Xanax pills on dark-web marketplaces; the government seized more than 9,000 bitcoin from him over the course of the investigation. A separate wallet linked to the defunct exchange BTC-e sent 925.512 BTC worth $57 million through the same relay pattern. Both intermediary wallets were emptied in the same session.
The ether skipped the middle step. A wallet connected to Brian Krewson, the former Oracle employee named in a $54 million money-laundering scheme tied to narcotics proceeds, sent 30,007 ETH worth $53.09 million straight to a Coinbase Prime deposit address. A separate 140.214 BTC moved between government Coinbase Prime addresses and a Coinbase cold wallet, the kind of internal shuffle that shows on both the inflow and outflow side and reads as housekeeping rather than a market-facing move.
Whether any of this counts as a breach of Trump's order is a matter of interpretation. The March 2025 executive order specifically instructed federal agencies to hold seized bitcoin in the Strategic Bitcoin Reserve. It did not extend the same treatment to ether or any other asset, which means the ETH portion of Monday's transfers sits well inside the White House's stated policy. The bitcoin is harder to defend. Coinbase Prime deposits do not necessarily mean liquidation, but they are the mechanical prerequisite for one, and the coins were laundered through fresh wallets in a way that reads less like custody consolidation and more like operational preparation.
Government-linked wallets tracked by Arkham still hold roughly $20.65 billion in crypto, including 324,552 BTC, 28,394 ETH and 145.549 million USDT, most of it from law enforcement seizures. Monday's batch is a rounding error against the total. That is part of what makes the transaction pattern odd. If the goal were sale, the Treasury would have telegraphed something bigger. If the goal were pure custody consolidation, there would be no need to route bitcoin through burner addresses. The middle case, that a specific tranche is being prepared for disposal without any public announcement, is the one the numbers support.
The reserve itself has already had a difficult year. Bloomberg reported earlier this month that the Strategic Bitcoin Reserve had run into jurisdictional and legal snags. Congress has not appropriated funds to buy new bitcoin, so the reserve depends almost entirely on forfeited assets, and the executive order's carveout is only as strong as the agencies choosing to observe it. If the Justice Department or Treasury conclude they can move seized coins under existing forfeiture rules without touching the reserve designation, the ban functions less as a ceiling and more as a policy suggestion.
Bitcoin was trading around $62,600 as Monday's transfers cleared, down roughly 2.5 per cent on the day as the market absorbed renewed US-Iran tension and traders repositioned ahead of the June inflation print. Ether was near $1,800. If any part of the $235 million bitcoin batch or the $53 million ether batch is sold this week, it will hit a market that has spent the last month digesting an eight-week ETF outflow streak that only broke on 7 July. That is not the environment in which quiet institutional selling goes unnoticed.
The government has not commented on the movements. The White House has not clarified whether the executive order applies to seized coins whose forfeiture predates the March 2025 signing, or only to future seizures. Until it does, every routing decision like Monday's will be read as a test of how firm the no-sell pledge actually is.
