The U.S. government has transferred 19,800 Bitcoin worth $1.9 billion from Silk Road seizures to Coinbase Prime, fueling speculation about potential liquidation.
The United States government has transferred approximately 19,800 Bitcoin (BTC), valued at $1.9 billion, from wallets associated with the Silk Road case to Coinbase Prime, according to blockchain data reported by Arkham Intelligence. The move has raised speculation about potential market implications, as the funds could be prepared for liquidation.
U.S. Government moves $1.92 billion worth of #Bitcoin to a new address. pic.twitter.com/W90VtXJpps
— TFTC (@TFTC21) December 2, 2024
The Bitcoin in question stems from a 2021 investigation into James Zhong, who pleaded guilty to wire fraud related to his manipulation of the Silk Road marketplace in 2012. U.S. authorities seized over 50,000 BTC as part of the case, with the Department of Justice (DOJ) announcing the confiscation in 2022. The coins were found in various locations, including a single-board computer hidden in a popcorn tin.
The U.S. Marshals Service, the DOJ division tasked with managing seized assets, partnered with Coinbase Prime earlier this year to custody and potentially trade large-cap digital assets. The latest transfer to Coinbase Prime may indicate plans to sell or trade the Bitcoin. Previous government sales of Silk Road-related BTC have caused temporary dips in the market.
In March 2023, the government sold nearly 10,000 BTC for $216 million, according to court filings. While the DOJ outlined a plan to sell remaining Silk Road assets in tranches during 2023, there have been few updates until this recent transfer.
Bitcoin’s price experienced a modest dip, falling below $96,000 following the transfer. Analysts suggest the market may be bracing for selling pressure, as previous sales by the U.S. government have caused notable volatility. Despite this, the government still holds an estimated $18 billion worth of seized digital assets.
The movement of seized Bitcoin comes as policymakers debate the role of Bitcoin in the U.S. financial system. Some lawmakers, including Senator Cynthia Lummis, have proposed creating a “strategic Bitcoin reserve.” This idea aligns with broader discussions about the U.S. government’s approach to Bitcoin under the incoming Trump administration.
The Silk Road case, which involved the use of Bitcoin for illicit transactions on the now-defunct dark web marketplace, continues to influence public perceptions of Bitcoin. Ross Ulbricht, the platform’s creator, is serving a life sentence without parole. Calls for clemency have gained traction within the Bitcoin community, with President-elect Donald Trump pledging to commute Ulbricht’s sentence “on day one” of his second term.
As the U.S. government manages its extensive holdings of seized Bitcoin, the community is watching closely for further moves. Whether these funds will be sold, traded, or integrated into a potential strategic reserve remains uncertain.
