The U.S. Department of Justice [DOJ] transferred 30,174 bitcoins worth roughly $2.1 billion from the infamous Silk Road marketplace to a new wallet on Coinbase. On-chain data revealed that a test transaction of 0.001 Bitcoin was first sent to a Coinbase Prime address from a wallet associated with the DOJ. Subsequently, a larger transaction of 30,174 BTC, valued at around $2 billion at the time, was initiated at a new address.
The transaction was part of the holdings seized from James Zhong, a Georgia native, who had stolen over 50,000 BTC from the notorious darknet in 2012. He later pleaded guilty to wire fraud related to the illegal acquisition of tokens. The mastermind behind the illicit marketplace, Ross Ulbricht, received a life sentence for his involvement.
Regarding the DOJ’s move, the US government still holds 209K bitcoins. The transfer nevertheless has sparked intense speculation in the community. Some members suggested that the coins associated with Silk Road might have already been sold, citing reports indicating a planned sale of over $130 million worth of bitcoin.
Silk Road Bitcoin Sale and Post-Trade Settlement
As per a report by the leading news outlet, on January 25, the US government planned to sell around $130 million worth of bitcoins linked to the Silk Road. This implies that the government intended to liquidate a portion of the seized bitcoins by selling them on the market.
Likely, the USG/Silk Road coins were already sold, and this is a post-trade settlement. Blockworks_ reported on Jan 25 that they were going to sell for $130 million. Today they moved ~2k BTC ($131m) to CB. To be clear, counter to what many have said, 30k BTC was not sent to coinbase. from ~31,799 BTC, 0.00010000 BTC (100k sats) was sent in a test tx to coinbase, then 1999.999 BTC was sent to coinbase. the remaining 29,799 remain unspent and are likely still sitting with the US gov
There was still confusion surrounding the transaction, with some claiming the entire 30,000 BTC was not transferred to Coinbase. According to Alex Thorn, there are still 29,799 BTC remaining unspent. These bitcoins are likely still under the control of the United States government and have not been included in the recent transfers to Coinbase.