The US government has transferred 19,800 Bitcoin, valued over $1.9 billion, to Coinbase Prime. The Bitcoin was among a large haul confiscated from the infamous Silk Road site during an operation in 2021.
Blockchain analytics show that the transfer came from a wallet associated with the Silk Road seizure, which resulted in James Zhong’s conviction for wire fraud. Zhong exploited system flaws in the marketplace to siphon off Bitcoin, which police eventually recovered.
In 2022, the US Department of Justice announced that it had confiscated over 50,000 Bitcoin from Zhong, which included funds stored on unconventional devices like a single-board computer disguised in a popcorn tin. Over the years, the government has gradually transferred sections of the stolen Bitcoin to various wallets, with this newest transfer being the most recent.
While the objective of this transfer is unknown, it has sparked conjecture about the government’s intentions—whether it plans to sell, hold, or trade the assets. Previously, conversations among politicians raised the potential of establishing a strategic Bitcoin reserve in the United States.
The Silk Road marketplace, which operated on the dark web, permitted millions of transactions involving illegal goods and services. Ross Ulbricht, the founder, is currently receiving a life sentence without parole. Despite pleas from the crypto community and political assurances, there has been no official attempt to commute his sentence.
This transfer showcases the ongoing management of confiscated bitcoin by US officials, highlighting the government’s increasing involvement in the digital asset industry. It also emphasizes the relevance of platforms such as Coinbase Prime in managing institutional-scale cryptocurrency transactions.
