USMS likely selling seized Silk Road Bitcoin after a service agreement with Coinbase signals impending asset sales.
Dispute over US government Bitcoin sales as analysts question the imminent sale of Silk Road’s seized assets.
$600M Bitcoin transfer by the US government to Coinbase sparks market speculation on potential selling pressure.
The United States Marshals Service (USMS) is likely selling Bitcoin seized from the Silk Road marketplace, according to finance lawyer Scott Johnsson. His assertion is based on a service agreement signed between the USMS and Coinbase in June. This agreement suggests that when Bitcoin reaches Coinbase Prime, it signals that the USMS has either sold or is about to sell these assets.
https://twitter.com/SGJohnsson/status/1824285716286751214
Johnsson noted that the USMS is transferring Bitcoin to a custodial address as per the agreement’s terms. The agreement requires that USMS assets remain completely segregated. Hence, when a transfer is made to Coinbase Prime or another commingled exchange address, it’s a clear sign that a sale has occurred or is imminent. Formal confirmation of these transactions will be available with the Department of Justice’s Asset Forfeiture Program report for fiscal year 2024, expected in January.
Debate Over Imminent Bitcoin Sale
However, there is disagreement about this interpretation. Ryan Lee, chief analyst at Bitget Research, argued that despite initial concerns, the Silk Road Bitcoin is unlikely to be sold soon. The cryptocurrency community is generally unsure and speculative about government-held Bitcoin and its possible effects on the market, which is reflected in this standoff.
Furthermore, August 15 saw the US government transfer nearly $600 million worth of Bitcoin to Coinbase, according to on-chain analytics firm Arkham Intelligence. The recipient of this Bitcoin was a Coinbase Prime deposit wallet.
Historically, large transactions by holders, known as “whales,” can impact Bitcoin’s price. Investors often track these transactions to anticipate potential selling pressure.
Political and Historical Context
Arguably, the largest geopolitical stake in Bitcoin right now is held by the US government. This idea has been echoed by former President Donald Trump. Trump talked about Bitcoin holdings that the US government has and He's willing to keep them if he becomes the president again in office. 2024 Republican presidential nominee This further complicates the matter.
The 10,000 Bitcoins that were just moved were initially taken during the 2022 raid on the Silk Road. The Department of Justice declared that 50,000 Bitcoin had been taken from the dark net marketplace during that operation. This on-chain movement of funds follows another major transfer in April when the US government moved $2 billion worth of Bitcoin seized from Silk Road.
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