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US Government Sends Silk Road Bitcoins to Coinbase, Holds Worth $2 Billion
- The US government has sent around 2,000 Bitcoin to an address controlled by crypto exchange Coinbase, suggesting it may be planning to sell a large amount of the crypto.
- The transfer followed a smaller test transfer of 0.001BTC, which was brought to the attention of the crypto community by an X user.
- Bitcoin was down on the news, with fears a large-scale sell off by the US government could adversely impact price.
According to data from crypto analytics firm Arkham, and information pieced together by X sleuths, the US government has sent approximately 2,000 BTC, valued at around US$130 million (AU$199 million), to an address associated with Coinbase.
The move is widely seen as signalling the government’s intention to sell some of its enormous Bitcoin holdings. The transferred Bitcoin is just a small fraction of the almost 50,000 Bitcoin the US government seized in late 2022 in connection with the dark web marketplace Silk Road.
Initially it was reported that approximately 30,000 BTC had been sent to Coinbase, however most of that amount is currently still being held in another wallet controlled by the government. This transfer comes after the US government issued a notice in January of its intention to sell US$130 million worth of Bitcoin.
Related: Why the US Government Is A Bitcoin Whale
Test Transfer Signalled Government’s Intentions
The crypto community first became aware that the US government might be looking to sell off some of its BTC holdings when X user ZachXBT posted that an address controlled by the US government had sent a test transfer of 0.001BTC, valued at US$69 (AU$106), to an address controlled by crypto exchange Coinbase:
At first it looked like the government was planning to move all 30,175 BTC, valued at around US$2 billion(AU$3 billion), held in the account to Coinbase—but according to data from crypto analytics firm Arkham, so far only 2000 BTC, valued at US$131.7 million (AU$202.3 million), have been transferred. The remaining BTC are being held in another address linked to the US government.
Bitcoin Came From Silk Road Seizure
The transferred Bitcoin was part of a huge haul of around 50,000 BTC made by the US government in connection with crimes associated with the dark web marketplace, Silk Road. These BTC were seized in late 2022, almost a decade after Silk Road itself was shut down.
Related: SEC’s Billion-Dollar Fraud Trial Commences, As Do Kwon Leaves Prison
The founder of the Silk Road, Ross Ulbricht, is now serving a life sentence without the possibility of parole for a raft of crimes related to the operation of the marketplace, including drug trafficking and money laundering offences.
The price of Bitcoin has fallen recently on the back of a strengthening US dollar relative to other global currencies and better than expected US factory data. The news that the US government may be looking to sell hasn’t helped — according to CoinGecko at the time of writing the OG crypto was down 5.7% on the day and 7.2% for the week.
Author
Jody McDonald
Jody is a Brisbane-based freelance writer who specialises in writing about business, technology, and the future of work.
