- Nearly $600 million worth of bitcoin seized from the Silk Road case has been sent to a Coinbase wallet
- The 10,000 BTC was originally sent from a known U.S. government wallet about two weeks ago
- The transfer is likely part of approximately $2 billion worth of bitcoin the U.S. Department of Justice confiscated from the Silk Road dark web market
The U.S. Department of Justice appears to have transferred nearly $600 million worth of bitcoin connected to the now-defunct dark web marketplace Silk Road to a wallet address associated with Coinbase.
Background on Silk Road Bitcoin Seizure
In 2013, the U.S. government shut down Silk Road, an online black market known for selling illegal drugs and other illicit goods. As part of its crackdown, the government seized approximately $2 billion worth of bitcoin connected to Silk Road.
The seized crypto haul has been controlled by the U.S. Marshals Service. Over the years, the Marshals have periodically auctioned off chunks of the confiscated bitcoin.
In late 2022, a federal appeals court finalized the forfeiture of nearly 70,000 bitcoin linked to Silk Road, allowing the DOJ to retain permanent control over the remaining cryptocurrency.
Recent Transfer of Silk Road BTC to Coinbase
According to blockchain intelligence firm Arkham, the DOJ recently moved 10,000 bitcoin worth nearly $600 million from a government-controlled wallet to an address associated with Coinbase Prime.
Arkham first noticed the DOJ transferring bitcoin believed to be from the Silk Road seizure to an unknown wallet in late July 2022. Now, that bitcoin appears to have been forwarded to Coinbase.
It is unclear why the DOJ moved the funds to Coinbase Prime, which is the exchange’s institutional trading platform. The agency has not issued any public statements on the transfer.
Questions Raised About DOJ’s Plans
The movement of such a large amount of formerly illicit bitcoin onto Coinbase is notable for a few reasons.
For one, it raises questions about whether the DOJ plans to liquidate more of the Silk Road cryptocurrency through Coinbase. It also shows that despite its criminal origins, bitcoin from the Silk Road seizure is being treated similarly to legally obtained crypto.
Additionally, the on-chain transfer of such a massive sum of bitcoin highlights how transparent blockchain transactions can be. Chain analysis firms like Arkham closely monitor high-value blockchain activity, making it difficult for even government agencies to move crypto undetected.
The DOJ’s plans for the nearly $2 billion in total Silk Road bitcoin it now controls remain unclear. But its recent transfer of $600 million worth to Coinbase has brought renewed attention to this long-running cryptocurrency forfeiture case.
