Silk Road Bitcoin Worth Nearly $2B Moved to Coinbase Prime

The transfer could spark selling pressure in the market as it indicates that the U.S. government is preparing to sell or has already sold the assets.

Dec 2, 2024, 5:33 p.m.

Nearly $2 billion worth of forfeited bitcoin (BTC) linked to the Silk Road website were moved to crypto exchange Coinbase Prime on Monday.

A wallet tagged as "U.S. Government: Silk Road DOJ Confiscated Funds" transferred 19,800 bitcoin on Monday to a fresh address with no prior history of transactions, blockchain data by Arkham Intelligence showed. The funds were then deposited to Coinbase Prime.

The transfer likely indicates that the government is preparing to sell or has already sold the assets. Earlier instances of government selling this year sparked sizable selloffs in bitcoin, but the action today — so far — has been more muted, with the price dipping a bit more than 1% to the current $95,800 since the news hit. Following this move, the U.S. government still holds $18 billion worth of seized crypto assets, per Arkham.

The Department of Justice announced in 2022 that it seized over 50,000 BTC and arrested James Zhong, who pleaded guilty to wire fraud after the government alleged he manipulated the transaction system of dark web market Silk Road in 2012.

Last month, U.S. district court of Northern California requested involved parties to "stipulate that government may liquidate some or all" of the forfeited digital assets related to Silk Road and holding on the funds while an ongoing FOIA action resolves.

The last confirmed sale of Silk Road assets by the government was in March 2023 selling nearly 10,000 BTC for $216 million, court filings show. The government laid out plans in the filing to sell the remaining assets in four tranches during that year, but there wasn't follow-up communication about any sales since then. Earlier this year, the U.S. Marshals Service, a division of the DOJ, announced a partnership with Coinbase Prime to "safeguard and trade" the government's large-cap digital assets.