Key Takeaways
- A wallet controlled by the U.S. Department of Justice has moved 19,800 BTC, worth approximately $1.9 billion, to Coinbase Prime. The Bitcoins are part of the assets seized by the government in 2022 from James Zhong, the hacker responsible for stealing over 50,000 BTC from the dark web marketplace Silk Road.
- Zhong was arrested in 2022 and charged with wire fraud for his involvement in the loot involving 51,680 BTC, worth $4.9 billion, from the illicit marketplace between 2021 and 2014.
- It is unclear whether the government will be selling or trading the BTC, but the transfer has resulted in the price of the flagship cryptocurrency dropping to the $95,500 range.
- The creator of Silk Road, Ross Ulbricht, was sentenced to prison without the possibility of trial in 2015 for facilitating illegal activities on the marketplace. President-elect Donald Trump has promised to commute his sentence.
Records from blockchain analytics platform Arkham Intelligence showed that a crypto wallet linked to the U.S. government transferred approximately 20,000 BTC, valued at nearly $1.9 billion, to Coinbase Prime.
US Government Transfers Nearly $2 Billion Worth BTC Owned By Silk Road To Coinbase Prime
The Bitcoin holdings are part of the assets seized from James Zhong, a computer scientist and entrepreneur, who was convicted of wire fraud after stealing over 51,680 BTC from the notorious darknet marketplace Silk Road between 2012 and 2014. At the time of his arrest, the stolen tokens were worth $3.4 billion, while they are now valued at $4.92 billion.
The U.S. Department of Justice continues to hold around $18 billion worth of BTC, alongside approximately $217 million in Ethereum (ETH), and $122 million in USDT. The government announced in 2022 that it seized the Bitcoins from Zhong, which were found in a wallet on a “single-board computer that was submerged under blankets in a popcorn tin”. The Bitcoins were then moved to different cryptocurrency wallets.
The latest transaction from the wallet tagged ‘U.S. Government Silk Road SDoJ Confiscated Funds’ was executed in two parts, with the first transaction being a 0.001 BTC ($97) transfer to a Coinbase Prime deposit address, followed by the transfer of 19,800 BTC, worth approximately $1.9 billion, to an intermediary wallet before reaching the exchange.
The U.S. Marshals Service, the federal agency responsible for seizing cryptocurrencies and other assets related to criminal actions, announced in July that it would partner with Coinbae Prime to custody tokens connected to asset forfeitures.
In August, the government-controlled wallet reportedly moved 10,000 BTC, valued at approximately $600 million, to Coinbase.
According to data from CoinGecko, the price of Bitcoin dropped to $96,000 following today’s transfer. Before that, the U.S. government sold 10,000 BTC belonging to Silk Road in 2023 for $216 million. While the government promised to sell the remaining Bitcoins throughout the year, no sales were reported until four months ago.
However, it is unclear whether the transfer was part of a strategy by authorities to sell or trade the Bitcoins. Usually, when governments transfer large amounts of crypto to a centralized exchange, it indicates that a big sale is coming, destabilizing the market, and triggering market-wide sell-offs.
Trump Promises To Commute The Sentence of Silk Road Founder Ross Ulbricht
During its prime, the Silk Road marketplace facilitated millions of dollars worth of crypto transactions, allowing users to purchase illicit items like weapons, drugs, and stolen credit card information, among others. The platform’s creator, Ross Ulbricht, was arrested in 2015 and sentenced to life in prison without the possibility of parole.
Many crypto and human rights advocates are pressuring President-elect Donald Trump to commute Ulbricht’s sentence. He has promised to do so as soon as he gets into office, but it needs to be seen whether the 45th and 47th President of the United States will keep his word.
Meanwhile, Trump has backed a proposal by Senator Cynthia Lummis to establish a strategic Bitcoin reserve and introduce pro-crypto policies to grow and support innovation in the industry.
At the time of writing, Bitcoin (BTC) is trading at $95,394 – up 0.31% in the last 24 hours.
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