US Government Transfers Bitcoin Seized From Silk Road to Coinbase

  • April 3, 2024

A crypto wallet, allegedly tied to the U.S. government, has sent a number of Bitcoin (BTC) to a Coinbase Prime wallet, according to data from on-chain analysis platform Arkham Intelligence. This wallet currently holds 30.175 Bitcoin, equivalent to around $2 billion.

The latest move comes amid the bearish market, with Bitcoin dropping as low as $65,000, and it looks like BTC could go a lot lower. With a huge pump in early 2024, BTC may be in a position to fall into the $50,000 trading range for a while.

As reported, the wallet started moving 0.001 BTC earlier on Tuesday and another 1.999 BTC, worth around $139 million at current prices, to a Coinbase Prime address, within one hour, according to prominent crypto detective ZachXBT.

The USD Has BTC!

The Bitcoin holdings are believed to have been part of 50,000 BTC seized by the U.S. authorities from James Zhong, who attacked and stole assets from Silk Road. Silk Road is a now-defunct online marketplace operating on the dark web. It was launched in 2011 and shut down by the FBI in 2013.

This is the latest development related to the wallet address holding Bitcoin seized by the U.S. government from the Silk Road case. It follows the sale of 9,861 BTC for $216 million in March 2023. However, this new action contradicts their previous plan, which suggested the liquidation of only 2,934 BTC confiscated from the Silk Road black market.

The U.S. government took a similar act last month when they transferred a small amount of 15,000 BTC seized from the Bitfinex exchange exploit to a new wallet for testing purposes before moving the remaining funds.

The Silk Road marketplace witnessed the good and bad aspects of Bitcoin’s development in the early days. It was also one of the first platforms to adopt Bitcoin as a payment method. However, this level of anonymity and mismanagement made it a go-to destination for illegal conduct.

Over its 2.5-year existence, the Silk Road facilitated trades exceeding 9.9 million BTC, equivalent to roughly $500 billion USD, before being shut down by the FBI. The Silk Road’s legacy continues to be felt today. In a recent move, the US Department of Justice seized nearly $1 billion USD worth of Bitcoin from the world’s fourth-largest Bitcoin wallet, alleging it belonged to the Silk Road.

Despite recently selling Bitcoin seized from the Silk Road case, the U.S. government remains a major crypto holder. They still possess over 207,000 BTC, valued at up to $13 billion, primarily from evidence gathered during cryptocurrency-related crime suppression activities over the past decade. This includes 94,600 BTC, worth over $6 billion, seized from the Bitfinex hack.

Other countries reportedly holding Bitcoin include El Salvador, Germany, Ukraine, Bhutan, Venezuela, and Finland. China is also among BTC holders, with 195,000 BTC reportedly seized from the Plus Token scam in 2020.

Uncertain US Government Action Triggers Bitcoin Price Dip

The government’s alleged move comes amid the market correction. According to data from CoinGecko, Bitcoin dropped below $65,000 after the news surfaced. At the time of writing, BTC is trading at around $66,000, down almost 4.5% in the last 24 hours.

Although the reason behind this move remains uncertain, crypto market members worry about a deeper correction in the near future.

On the historical front, Bitcoin’s current downward trend is in line with the historical pattern of pre-halving. The Bitcoin halving, the highly anticipated event, is set to happen in less than 20 days. Previous cycles show that Bitcoin entered a sharp decline as the halving approaches.

However, on the bright side, if Bitcoin’s price follows its old patterns, it could set a new all-time high a few months after the halving. The road to new highs could be a rough one, so if you are new to BTC, know that it is a wild asset.

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