Part of the 50,000 $BTC Held by U.S. Government sent to Coinbase

The U.S. government has made a $217 million transfer of seized Bitcoin to cryptocurrency exchange Coinbase, as part of a $1 billion shuffling of Bitcoin among its wallets. The move has caused concern within the crypto community that the government may be preparing to sell the Bitcoin, which could potentially drive down the price of BTC.

On-chain analytics firm Glassnode flagged the transfers, revealing that 9,861 BTC were sent to Coinbase, while an additional 40,000 BTC “associated with U.S. government law enforcement seizures” were being moved between wallets controlled by the government. On-chain security company PeckShield later tweeted that the roughly 40,000 BTC had been consolidated into two wallets, and it is believed that the funds originated from the Silk Road darknet market.

Silk Road, the first crypto-powered dark market, was shut down in 2013 after the arrest of its founder, Ross Ulbricht. The government seized 173,991 BTC at the time, including 144,336 owned by Ulbricht. The coins were sold in four auctions between 2014 and 2015. In November 2020, the U.S. Department of Justice filed a civil forfeiture action against a person it claimed was in possession of more than 50,000 BTC stolen from Silk Road, and in November 2022, a man named James Zhong pleaded guilty to wire fraud and forfeited his stash of BTC to the government.

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