Blockchain records showed the United States government moved more than $1.9 billion worth of Bitcoin seized from the Silk Road marketplace to a Coinbase Prime wallet.
According to data from blockchain analytics firm Arkham Intelligence, on Dec. 2, a wallet tied to the US government transferred roughly 19,800 Bitcoin (BTC) — worth $1.9 billion at the time — to a Coinbase Prime deposit address. US authorities seized the Bitcoin in a 2021 investigation of James Zhong, who was later convicted of wire fraud related to the Silk Road marketplace.
Blockchain data showing the US government transferring BTC to Coinbase Prime wallet. Source: Arkham Intelligence
The US Justice Department announced in 2022 that it had seized more than 50,000 BTC from Zhong at the time, including coins in a wallet “on a single-board computer that was submerged under blankets in a popcorn tin.” The government has since moved many of the Bitcoin to different wallets, but it still held roughly $18 billion worth of BTC at the time of publication.
It’s unclear if moving the coins was part of a strategy by authorities to trade or sell the funds. US lawmakers, including Senator Cynthia Lummis and President-elect Donald Trump, have suggested passing legislation to establish a “strategic Bitcoin reserve” in the US.
The US Marshals Service — the federal agency responsible for seizing cryptocurrencies and other assets involved in criminal actions — said in July it would partner with Coinbase Prime to custody tokens connected to asset forfeitures. Coinbase still faces a civil suit filed by the US Securities and Exchange Commission in June 2023.
Developments in the Silk Road case
In its heyday, the Silk Road marketplace facilitated millions of dollars worth of transactions with crypto users, who were able to purchase illicit items like weapons, drugs and stolen credit card information. Ross Ulbricht, the platform’s creator, was sentenced to life in prison without the possibility of parole in 2015.
Since the 2024 US election, many in the crypto industry have called on Trump to commute Ulbricht’s sentence. The president-elect promised to do so “on day one,” but he had already had the opportunity during his first term.
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