Key Takeaways
- The U.S. government transferred 10,000 Bitcoin (worth $600 million) seized from Silk Road to Coinbase Prime, possibly for custody rather than immediate sale.
- The move raised concerns about potential market impact, but analysts believe a large-scale sale is unlikely at this time.
The U.S. government has moved 10,000 Bitcoin (BTC), valued at approximately $600 million, to Coinbase Prime, an institutional platform of the cryptocurrency exchange giant. This transfer was detected by blockchain data from Arkham Intelligence on Wednesday, revealing the movement of these assets that were originally seized from the notorious Silk Road marketplace.
The Bitcoin was transferred from a wallet identified as the “U.S. Government: Silk Road DOJ Confiscated Funds.” This wallet had received the funds about two weeks prior to the transfer. The U.S. Department of Justice (DOJ) had previously seized these assets in 2022 after arresting James Zhong, who was charged with wire fraud for manipulating the transaction system of the Silk Road in 2012.
The transfer to Coinbase Prime has raised questions about whether the U.S. government intends to sell the Bitcoin. While deposits to exchanges typically signal a plan to liquidate assets, analysts suggest that this transfer may have been conducted for custody purposes rather than an immediate sale. Last month, the U.S. Marshals Service, a division of the DOJ, announced a partnership with Coinbase Prime to “safeguard and trade” large-cap digital assets, although details on the handling of these tokens remain scarce.
BREAKING: 10K Silk Road BTC ($593.5M) moved to Coinbase Prime
— Arkham (@ArkhamIntel) August 14, 2024
Wallet bc1ql received 10K BTC from a known US Government wallet 2 weeks ago. This BTC has just been sent on to 33J, a Coinbase Prime deposit wallet. pic.twitter.com/kNLsiJzL95
Despite initial concerns, the transfer did not cause significant market fluctuations. Bitcoin’s price dropped to $59,000 from $61,000 earlier in the day, but this movement occurred before the transaction. Analysts have noted that a sale of this magnitude could have a drastic impact on the market, but it is not considered likely at this time.
The U.S. government currently holds approximately $12 billion worth of Bitcoin, along with smaller amounts of other seized cryptocurrencies. The last confirmed sale of Silk Road assets occurred in March 2023, when the government sold 9,861 BTC for $216 million. However, there has been no follow-up on additional planned sales since that time.
