- A wallet overseen by the U.S. Department of Justice has transferred 19,800 BTC, valued at approximately $1.9 billion, to Coinbase Prime. These Bitcoins were part of the assets confiscated from James Zhong, the hacker who stole over 50,000 BTC from the Silk Road dark web marketplace in 2022.
- In 2022, Zhong was apprehended and charged with wire fraud related to the theft of 51,680 BTC, which amounted to $4.9 billion, from the illicit marketplace between 2011 and 2014.
- It remains uncertain whether the government intends to sell or trade the BTC, but this transfer has led to a decline in the price of the leading cryptocurrency, bringing it down to the $95,500 range. Ross Ulbricht, the founder of Silk Road, was sentenced to life imprisonment in 2015 for his role in facilitating illegal activities on the platform, with President-elect Donald Trump indicating a potential commutation of his sentence.
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Silk Road Seizure and Bitcoin Transfers
Blockchain analytics platform Arkham Intelligence has identified a significant transaction involving a U.S. government-linked crypto wallet, transferring roughly 20,000 BTC—valued at nearly $1.9 billion—to Coinbase Prime. These Bitcoin holdings are part of the assets seized from James Zhong, a computer scientist convicted of wire fraud after embezzling over 51,680 BTC from the Silk Road darknet marketplace between 2012 and 2014. At Zhong’s arrest, the stolen Bitcoin was worth $3.4 billion and has since increased in value to $4.92 billion.
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The U.S. Department of Justice (DoJ) retains approximately $18 billion worth of Bitcoin, alongside holdings of $217 million in Ethereum (ETH) and $122 million in USDT. These assets, confiscated from Zhong, were hidden on a “single-board computer submerged under blankets in a popcorn tin” and subsequently moved across various wallets.
The latest transaction from the wallet, identified as ‘U.S. Government Silk Road SDoJ Confiscated Funds,’ occurred in two stages: an initial transfer of 0.001 BTC ($97) to a Coinbase Prime deposit address, followed by a larger transfer of 19,800 BTC, worth about $1.9 billion, to an intermediary wallet before reaching the exchange.
Ongoing Government Crypto Sales
The U.S. Marshals Service, which oversees asset forfeitures, announced in July a partnership with Coinbase Prime for custodying seized cryptocurrencies. In August, the government wallet reportedly moved 10,000 BTC, valued at $600 million, to Coinbase.
CoinGecko data showed Bitcoin’s price falling to $96,000 following this latest transfer. Earlier this year, the government sold 10,000 BTC confiscated from Silk Road for $216 million, and although it had committed to selling the remaining BTC in 2023, no additional sales were reported until four months ago.
The purpose of the latest transfer remains uncertain. Large crypto movements by governments to centralized exchanges often signal impending sales, potentially destabilizing markets and triggering sell-offs.
Silk Road’s Legacy and Ulbricht’s Life Sentence
Silk Road, a notorious darknet marketplace, enabled millions of dollars in cryptocurrency transactions for illicit items, such as drugs, weapons, and stolen data. Its founder, Ross Ulbricht, was arrested in 2015 and sentenced to life imprisonment without parole.
Many advocates for cryptocurrency and human rights have urged President-elect Donald Trump to commute Ulbricht’s sentence. Trump has pledged to review Ulbricht’s case upon taking office, though it remains uncertain whether he will fulfill this promise.
Strategic Bitcoin Reserve and Innovation Support
Trump has expressed support for pro-crypto policies, backing a proposal by Senator Cynthia Lummis to establish a strategic Bitcoin reserve. This move aims to foster innovation in the cryptocurrency industry and position the U.S. as a leader in blockchain technology.
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