US Government Moves $768,000 Seized FTX Tokens, Sparks Chainlink Sell-Off Fears

A wallet tied to US government seized FTX Chainlink holdings moved 98,590 Chainlink (LINK) tokens, worth about $768,000, to Coinbase Prime on Wednesday, reviving speculation over a potential sale.

Blockchain trackers flagged the deposit within minutes. However, on-chain data alone does not confirm that the tokens are headed for the open market.

Why the Seized FTX Chainlink Transfer Matters

On-chain tracker Lookonchain first reported the movement, and tracking account Solid Intel flagged the same deposit.

Arkham labels the sending address under its US government entity and has documented earlier movements from the same cluster.

Follow us on X to get the latest news as it happens

The funds originate from assets confiscated after FTX and Alameda Research collapsed in November 2022.

A federal judge later ordered Sam Bankman-Fried to forfeit $11 billion after his fraud conviction, with recovered funds directed toward victim compensation.

The US Marshals Service selected Coinbase Prime in July 2024 to custody and trade its large-cap digital assets.

“After a comprehensive process, the U.S. Marshals Service (USMS), a division of the U.S. Department of Justice, selected Coinbase Prime as its partner to safeguard and trade its “Class 1” (large cap) digital assets,” read an excerpt in a 2024 Coinbase blog.

Therefore, deposits to the platform often precede custody changes, over-the-counter deals, or liquidations.

The agency has managed seized crypto sales for over a decade, beginning with its auction of 30,000 Silk Road bitcoins in 2014.

Historically, it has favored structured sales over open-market dumps.

The transaction also extends a pattern of earlier seized altcoin transfers involving Uniswap (UNI), Render (RNDR), Ethereum (ETH), and The Sandbox (SAND), plus stablecoins.

Meanwhile, the FTX estate keeps repaying customers, with its fourth creditor distribution round delivering $2.2 billion in March.

Analysts See Limited Risk of a LINK Sell-Off

Chainlink’s current price sits near $7.66, down 2% over the past 24 hours. The token holds a $5.57 billion market cap and ranks 21st among cryptocurrencies.

The transferred amount equals less than 0.4% of LINK’s $225 million daily trading volume. It also represents roughly 0.01% of the 727 million tokens in circulation.

Consequently, even an outright sale would barely move market liquidity.

Sentiment around the token remains cautious after a 27% slide over the past 30 days. LINK has also shed 49% over the past year, leaving holders alert to new supply signals.

In contrast, Chainlink’s ETF inflow outlook suggests institutional demand could absorb modest government supply over time.

Whether the tokens move to an over-the-counter desk or stay in custody should become clearer in the coming days.

The wallet’s next transaction will reveal whether the deposit marks routine management or the start of a liquidation.

Until then, the sell-off fears look larger than the numbers behind them.

The post US Government Moves $768,000 Seized FTX Tokens, Sparks Chainlink Sell-Off Fears appeared first on BeInCrypto.