US Government Shocks Crypto Market: ETH Transfer to Coinbase Fuels Fears of Massive Sell-Off

Whale alert: Uncle Sam's wallet just twitched. The US government moved an undisclosed pile of Ethereum to Coinbase—and traders are bracing for impact.

Market jitters hit as the feds play crypto whale

When the world's biggest holder of seized assets starts shifting ETH to an exchange, it doesn't take a blockchain sleuth to connect the dots. The timing couldn't be worse—just as ETH was showing signs of recovery after last month's regulatory onslaught.

Coinbase's institutional on-ramp looks suspiciously like an off-ramp this time. The move reeks of another bureaucratic fire sale—because nothing says 'sound fiscal policy' like dumping digital assets at market bottoms. Watch those order books: when governments trade, retail gets the crumbs.

TLDR

• The US government has moved 86.56 ETH worth around $200,000 to a Coinbase Prime deposit address.
• The Ethereum was initially seized from Chase Senecal in 2022 during a law enforcement operation.
• A small $10 test transaction was sent before transferring the full amount to Coinbase Prime.
• Institutions and large sellers typically use Coinbase Prime to manage trades with minimal market impact.
• This transaction has raised concerns in the crypto market about a possible government-initiated Ethereum selloff.

The US government has transferred 86.56 ETH, valued at approximately $200,000, to a Coinbase Prime deposit address. This movement originated from a law enforcement-controlled wallet and has sparked immediate reactions in crypto trading circles. The transaction followed a test transfer of $10 worth of Ethereum.

The ETH was previously seized from Chase Senecal, known online as Horror, during a 2022 enforcement action involving digital asset fraud. Senecal was linked to NFT scams and other illicit cyber activities, leading to the seizure of assets. The US government, which frequently sells seized crypto assets, may be preparing for liquidation.

This transfer to Coinbase Prime, commonly used by institutional entities, often indicates an intention to sell assets with minimal market disruption. While the amount appears minor, such transfers usually signal broader activity by the US government. The public nature of these moves creates unease across the digital asset market.

ARKHAM ALERT: THE US GOVERNMENT JUST DEPOSITED $200K ETH TO COINBASE

A US Government wallet just moved $200K to a Coinbase Prime Deposit, after a $10 test transaction.

This ETH was originally seized from Chase Senecal in October 2022. pic.twitter.com/CFdfN73zyD

— Arkham (@arkham) July 7, 2025

Ethereum Transfer Sparks Market Reactions

Ethereum, the second-largest cryptocurrency by market cap, saw 86.56 ETH moved to Coinbase Prime from a US government wallet. The transfer is notable because the US government tends to liquidate seized assets through centralized exchanges. Even though the dollar value is low, the symbolic weight of such transactions is significant.

Market participants continue monitoring US government wallet activity because past sales often preceded short-term price dips. Transfers to institutional platforms like Coinbase Prime suggest preparation for sales rather than simple storage or custodianship. The transparency of blockchain allows for these movements to be tracked in real time.

Though there is no official sale confirmation yet, the ETH remains on Coinbase Prime and is ready for possible liquidation. Traders observe these developments due to historical patterns and sudden price fluctuations that may follow. This MOVE adds to broader concerns about future crypto sales by the US government.

US Government’s Crypto Strategy Under Scrutiny

The US government has previously sold large quantities of Bitcoin and ethereum after seizing them from cybercrime and fraud cases. Each movement from government-controlled wallets triggers analysis and speculation from blockchain firms and financial institutions. These steps, while legal, have an outsized impact on crypto sentiment.

On-chain analysts have already flagged this Ethereum transaction due to its origin and timing. While the US government’s asset sale process follows protocol, the community remains sensitive to sell signals. Historical behavior suggests further sales may follow, depending on agency decisions.