$600M Worth of Silk Road Bitcoin Transferred to Coinbase Prime, Potential Hold Strategy

The U.S. government recently transferred 10,000 bitcoin seized in connection with Silk Road to Coinbase Prime, as indicated by blockchain data from Arkham Intelligence. The crypto wallet that initiated the transfer received approximately $600 million worth of bitcoin from a wallet labeled as “U.S. Government: Silk Road DOJ Confiscated Funds” two weeks ago.

Typically, deposits to an exchange suggest an intention to sell assets, but in this instance, the transfer may have occurred for custody purposes. The U.S. Marshals Service, a division of the Department of Justice (DOJ), announced a collaboration with Coinbase Prime last month to “safeguard and trade” large-cap digital assets. The exact fate of the tokens upon reaching a centralized platform remains somewhat obscure.

Bitcoin experienced a drop from $61,000 to $59,000 earlier in the day; however, this price movement occurred before the mentioned transaction occurred. In 2022, the DOJ seized over 50,000 BTC and arrested James Zhong, who admitted to wire fraud after allegedly manipulating the transaction system of the dark web marketplace Silk Road in 2012.

The most recent confirmed sale of Silk Road assets by the government was in March 2023, involving the disposal of 9,861 coins for $216 million, as per court documents. The government outlined plans in the filing to sell the remaining assets in four tranches that year, but there has been no subsequent information regarding any sales since then.

Arkham reports that wallets associated with the U.S. government currently hold $12 billion worth of bitcoin along with lesser amounts of other confiscated cryptocurrencies.