Thomas Daniels
Bitcoin Declines 2% as U.S. Government Moves Silk Road BTC
Bitcoin (BTC) experienced a 2% decline following the U.S. government’s transfer of $240 million worth of Bitcoin to a Coinbase Prime address. According to Arkham Intelligence, the 3,940 BTC moved to Coinbase were originally seized from Silk Road vendor and narcotics dealer Banmeet Singh during a January trial.
Silk Road, a dark web marketplace established by Ross Ulbricht in 2011, was shut down by the Federal Bureau of Investigation (FBI) following Ulbricht’s arrest in 2013. In 2022, U.S. law enforcement seized approximately 50,000 BTC from Silk Road-related activities. The authorities have since seized and moved Silk Road Bitcoin on several occasions.
In a related move, a government-linked wallet transferred $2 billion in BTC on April 2, prompting similar market speculation. Following the recent transaction, the broader cryptocurrency market saw a modest decline, including Bitcoin.
Government Utilizes Coinbase for Bitcoin Liquidation
In March 2023, the U.S. government sold $216 million worth of BTC on Coinbase’s institutional platform, Coinbase Prime. This platform is frequently used for government liquidations, although Coinbase has faced regulatory scrutiny for alleged violations and illegal business practices.
Under Chairman Gary Gensler, the Securities and Exchange Commission (SEC) accused Coinbase of operating an unregistered securities exchange and an unlicensed broker-dealer. Coinbase has denied these allegations, arguing in court that the SEC has failed to provide clear regulations and registration processes for crypto businesses. Despite the ongoing legal battle, Coinbase continues to facilitate Bitcoin sales for the U.S. government.
