Nearly $20 million in cryptocurrencies was drained from U.S. government-linked wallets tied to funds seized from the notorious Bitfinex cryptocurrency exchange hack.

The theft included approximately $14 million in Aave USDC, $5.4 million in USD Coin, $1.1 million in Tether, and nearly $450,000 in Ethereum.

Remarkably, less than 24 hours after the theft, the hacker returned $19.3 million to the government wallet, representing 88% of the lost funds.

Blockchain analyst ZachXBT noted that some of the stolen funds were moved to instant exchanges, specifically through a 'nested exchange' that utilizes liquidity from Binance.

The motives behind the unauthorized transfer remain unclear, leaving analysts puzzled about the hacker's intentions.

The assets were transferred to a new wallet that was only five days old, raising suspicions of theft among on-chain analysts.

ZachXBT characterized the transfers as 'nefarious,' suggesting they align with tactics commonly associated with malicious actors.

The suspicious transfers occurred on October 24, involving a significant amount of stablecoins and Ethereum.

This incident is part of a broader pattern of security challenges faced by U.S. government entities, which have seen recent hacking incidents.

If the U.S. Marshals Service's security was indeed compromised, it would add another layer to the ongoing saga stemming from the original Bitfinex hack in 2016.

Following the return of funds, the hacker executed a $6.1 million transfer, leaving the wallet with only $130 in a meme coin.

The event has sparked discussions about the need for improved security measures and transparency in the management of government crypto assets.