A wallet linked to the US government and seized FTX assets on Wednesday transferred 98,590 Chainlink (LINK) to Coinbase Prime. The transfer amounted to about $768,000, which was enough to spark renewed market talk of a possible token sale.
Blockchain trackers noticed the transaction almost immediately. However, the transfer to Coinbase Prime does not itself prove that the tokens are being prepared for sale on the open market.
Why the Transfer of Seized FTX Tokens Caught the Market’s Attention
The first to report the movement of funds was Lookonchain. Later, the same transaction was noted by the analytics account Solid Intel.
Arkham classifies the sender’s address as part of a group of wallets linked to the US government. Other transfers of seized crypto assets have already been made from this cluster.
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These LINK tokens are part of the assets seized after the collapse of FTX and Alameda Research in November 2022. Later, the court ordered Sam Bankman-Fried to hand over assets worth $11 billion to the government after a guilty verdict in a fraud case. The returned funds are to be used to compensate affected exchange clients.
Interest in the transfer increased due to the recipient. The tokens went to Coinbase Prime, the very platform the US Marshals Service US chose in 2024 for storing and handling large digital assets.
At Coinbase they stated at the time:
“After a comprehensive selection process, the US Marshals Service (USMS), part of the US Department of Justice, selected Coinbase Prime as its partner for custody and trading of Class 1 digital assets.”
Such transfers do not always mean an immediate sale. Sometimes assets are simply moved to new storage, prepared for an OTC deal, or transferred as part of internal procedures.
US authorities already have significant experience with seized cryptocurrency. Back in 2014, the Marshals Service held an auction to sell 30,000 BTC seized in the Silk Road case. Government agencies usually opt for organized sales rather than dumping assets on the market.
The current transaction continues a series of similar transfers. Previously, authorities had already moved seized Uniswap (UNI), Render (RNDR), Ethereum (ETH), The Sandbox (SAND) and stablecoins.
Meanwhile, FTX liquidators continue to pay creditors. In March, as part of the fourth phase of distribution, affected clients received about $2.2 billion.
Analysts Do Not Expect a Major LINK Sell-Off
At the time of publication, Chainlink (LINK) was trading around $7.66, down about 2% in 24 hours. The project’s market capitalization was about $5.57 billion, keeping the token in 21st place among the largest cryptocurrencies.
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Concerns about the transfer are understandable, but the volume itself looks small for the LINK market. We’re talking about 98,590 tokens, and even if sold, this amount is unlikely to significantly impact liquidity.
Moreover, US authorities usually do not sell such assets directly through the order book. OTC deals or pre-arranged procedures are more often used to avoid unnecessary price pressure.
Investors are still watching the wallet, as any movement of seized FTX assets triggers a nervous reaction. After the exchange’s collapse, the market pays especially close attention to any transfers related to its former reserves.
Chainlink price performance. Source: CoinMarketCap.
The transfer amount is less than 0.4% of LINK’s daily trading volume, which exceeds $225 million. Compared to the circulating supply, it’s about 0.01% of 727 million tokens.
Therefore, fears of a possible sell-off seem stronger than the numbers themselves. Even a direct sale of this volume on the market would hardly be a major event for Chainlink liquidity.
At the same time, sentiment around LINK remains cautious. Over the past 30 days, the token has lost about 27%, and over the year it has fallen by about 49%. Against this backdrop, investors react painfully to any hints of additional supply.
Some analysts believe that potential demand from institutional players could easily absorb such a volume. Especially if the tokens are sold not through the market, but via an OTC deal.
Now it all depends on the wallet’s next moves. If the assets remain in custody, the transfer can be considered routine management of seized funds. If new transactions begin, the market will again talk about preparations for a sale.
For now, the panic looks premature. The transfer is notable in terms of the origin of the assets, but too small by itself to pose a serious threat to the LINK price.
