US Government Moves $593.5M Worth of Bitcoin Related to the Silk Road Seizure to Coinbase Prime

Arkham highlighted the transaction, which saw $593.5 million worth of Bitcoin move from a known US government wallet (U.S. Government: Silk Road DOJ Confiscated Funds) to wallet bc1ql two weeks ago but was then transferred to 3JJ, a Coinbase Prime deposit wallet.

The US government has moved a portion of the Bitcoin seized from the Silk Road to Coinbase Prime, according to blockchain analytics firm Arkham.

Over $593.5 million worth of BTC was shifted from a known US government wallet (U.S. Government: Silk Road DOJ Confiscated Funds) to wallet bc1ql two weeks ago, as highlighted by Arkham. However, the funds were then moved to 3JJ, a Coinbase Prime deposit wallet, according to the firm's analysis.

In 2022, the Department of Justice (DOJ) seized over 50,000 BTC when it arrested a man named James Zhong for allegedly manipulating the Silk Road dark web market's transaction system in 2012. Zhong pleaded guilty to wire fraud in the case.

The government later sold 9,861 of the Silk Road BTC for $216 million in March 2023. It planned to sell the remaining assets in four tranches over the rest of the year, but no further updates have been provided by the DOJ.

According to Arkham data, US government wallets currently hold $12 billion of BTC and smaller amounts of other seized crypto.

Last month, the DOJ's US Marshal Service announced a partnership with Coinbase Prime to "safeguard and trade its “Class 1” (large cap) digital assets."

The government's transaction comes amid concerns over a broader Bitcoin sell-off as Mt Gox and Jump Trading off-load large volumes of crypto.

Earlier this week, Mt. Gox transferred $2 billion worth of Bitcoin in a test transaction ahead of completing its distribution repayments to creditors.

Meanwhile, Jump Trading moved another 17,049 ETH from Lido on August 14 and began withdrawals. It also redeemed its remaining 21,394 WSTETH and 3,124 RETH into STETH.

Jump now holds over 28,000 STETH and over 24,000 ETH. The firm withdrew assets to centralized exchanges, including Binance, Coinbase, and OKX.

Earlier this month, Jump Crypto unstaked $300 million worth of crypto. Over 120,000 staked Ether have been liquidated since July 24, which was the day after the launch of US Bitcoin ETFs.

Increased selling pressure on BTC, BRN lead analyst Valentin Fournier noted in a Thursday research note.

"Despite the positive CPI data, Bitcoin has dipped slightly to around the $58,500 support zone. This movement is largely due to significant transfers of assets to exchanges by the US government (BTC) and Jump Trading (ETH), signaling a potential sell-off," Fournier wrote.

"However, we expect this support level to hold, allowing Bitcoin to resume its upward trend. As we expect an imminent announcement of rate cuts that would alleviate the pressure on risk-on assets, we believe that Bitcoin will keep rising towards $65-68K in the near term."

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