On July 12, 2023, the United States government executed a transfer of 9,800 bitcoins (BTC) valued at over $300 million, as indicated by onchain data. These bitcoins were originally obtained from the Silk Road hack orchestrated by James Zhong. In March, the Department of Justice also carried out a similar transfer involving bitcoins associated with Silk Road.
Approximately 9,800 BTC from the Silk Road stash underwent two transactions on Wednesday, purportedly being sent to wallets controlled by Coinbase. At the time of writing, the funds held by the U.S. government amount to $302 million, based on the current exchange rates for BTC.
The bitcoins originated from James Zhong, the convicted Silk Road hacker. When he was apprehended, federal authorities confiscated approximately 51,351.89785803 bitcoins on three separate occasions, along with a collection of precious metals and $661,900 in cash.
In March, the government liquidated 9,861 bitcoins for slightly over $200 million. Onchain observers and blockchain parsers also detected activity four months prior to this transaction. It is speculated that all the BTC from Zhong’s stash has been sold on Coinbase.
The choice to sell the bitcoins through Coinbase is uncharacteristic, as the U.S. government typically auctions off BTC with the assistance of the U.S. Marshals. For instance, the bitcoins seized from Ross Ulbricht in the Silk Road case were auctioned, with investors like Tim Draper acquiring some of the coins. Only recently has the government started moving cryptocurrency to spot exchanges.
We invite you to share your thoughts and opinions on the government’s decision to transfer this significant bitcoin stash on Wednesday. Please leave your comments and perspectives on this matter in the section below.
Frequently Asked Questions (FAQs) about seized Silk Road bitcoins
What is the significance of the US government transferring seized Silk Road bitcoins?
The US government transferring seized Silk Road bitcoins is significant because it involves a large amount of cryptocurrency, approximately $300 million worth, being moved. It raises questions about the government’s usual auctioning process and their decision to send the funds to Coinbase instead.
How many bitcoins were transferred by the US government in this case?
The US government transferred 9,800 bitcoins, which were originally obtained from the Silk Road hack orchestrated by James Zhong. These bitcoins were valued at just over $300 million at the time of the transfer.
Where were the funds sent during the transfer?
The funds were reportedly sent to wallets controlled by Coinbase, a well-known cryptocurrency exchange platform. This is an unusual move, as the US government typically auctions off seized bitcoins with the assistance of the US Marshals, rather than transferring them to a spot exchange like Coinbase.
Has the US government sold all the bitcoins from James Zhong’s stash?
It is speculated that all the bitcoins transferred from James Zhong’s Silk Road stash have been sold on Coinbase. Previous onchain activity and blockchain observers detected similar movements of the funds, and it is likely that the government has completed the sale of these bitcoins.
What was the previous auctioning process followed by the US government for seized bitcoins?
The US government typically auctioned off seized bitcoins with the assistance of the US Marshals. For example, in the Silk Road case involving Ross Ulbricht, the government auctioned the confiscated bitcoins, and investors like Tim Draper participated in the auction to acquire some of the coins.
What are the concerns raised by the decision to transfer the bitcoins to Coinbase?
The decision to transfer the seized Silk Road bitcoins to Coinbase raises concerns about the government’s departure from their usual auction process. This move deviates from their established method of selling seized bitcoins and prompts questions about the reasons behind choosing Coinbase for this transfer.
More about seized Silk Road bitcoins
- US Government Transfers $300 Million Worth of Seized Silk Road Bitcoins
- Silk Road Bitcoin Stash Controlled by the Feds Moves, Funds Reportedly Sent to Coinbase
- US Department of Justice – Silk Road
- US Marshals Service