Bitcoin holdings worth approximately $2 billion, previously confiscated from the infamous Silk Road darknet marketplace, have been transferred to a new wallet associated with Coinbase, according to reports. The United States Department of Justice (DOJ) is responsible for executing the transactions involving the seized cryptocurrency.
Data from Arkham Intelligence revealed that the coin transfers occurred on April 2, 2024, at 16:14:20 UTC. The first transfer involved a small amount of 0.001 BTC, valued at $65.09, potentially a test transaction to verify the receiving address. This was followed by a second, much larger transfer of 30,174.7 BTC worth around $1.9 billion.
The U.S. government has amassed a significant Bitcoin holding over the years through asset seizures in financial crime cases, including the Silk Road marketplace, the Bitfinex hack, and the case of James Zhong, who exploited the Silk Road to steal over 50,000 BTC in 2012.
Government's Bitcoin Accumulation History
In March 2023, the U.S. government announced that it had raised more than $215 million after selling about 9,861 Bitcoin from the over 50,000 tokens recovered from Zhong's case. The recent transfer implies that the remaining proceeds from the Zhong case are still substantial, around 10,000 BTC.
The Silk Road marketplace, which operated for about a decade, was notorious for trading illegal items such as weapons, hard drugs, and stolen credit card details. Its founder, Ross Ulbricht, was apprehended in 2013 and sentenced to a 40-year jail term, which he is still serving.
Market Impact and Speculation
At the time of reporting, no official explanation has been provided for the reason behind the transactions, making it difficult to deduce the long-term effects of the transfer.
However, the short-term impact was evident. News of the transfer catalyzed a generalized market decline, with Bitcoin briefly dropping below the $65,000 price mark. However, the cryptocurrency has since recovered and is currently trading marginally above $66,000.
Speculation surrounds the purpose of the transfer, with some suggesting that the DOJ may be preparing to sell the seized Bitcoin on the open market, while others speculate that the move may be related to ongoing investigations or legal proceedings.
