The U.S. government’s movement of $240 million in Bitcoin (BTC) caused noticeable selling pressure on the cryptocurrency. According to Arkham Intelligence, these 3,940 BTC were originally forfeited from Silk Road vendor and narcotics dealer Banmeet Singh during a January trial.
Silk Road, a dark web marketplace created by Ross Ulbricht in 2011, was shut down by the FBI in 2013 following Ulbricht's arrest. In 2022, U.S. law enforcement confiscated approximately 50,000 BTC from Silk Road, with authorities having seized Silk Road Bitcoin on several occasions.
A similar event occurred on April 2 when the wallet linked to U.S. authorities moved $2 billion in BTC, causing speculation about a sell-off at the time. The recent Wednesday transaction led to a modest decline in the overall cryptocurrency market, including BTC.
Government Utilizes Coinbase for Bitcoin Liquidation
In March 2023, the U.S. government sold $216 million in BTC on Coinbase’s institutional platform, Coinbase Prime. This platform has become the preferred method for government liquidations, despite Coinbase facing regulatory scrutiny for alleged violations and illegal business practices.
Under the leadership of Chair Gary Gensler, the Securities and Exchange Commission (SEC) charged Coinbase with operating an unregistered securities exchange and unlicensed broker-dealer.
Coinbase has denied these allegations, arguing in court that the SEC has failed to provide clear rules and registration processes for crypto businesses. Despite the ongoing legal battle, Coinbase continues to facilitate the U.S. government’s Bitcoin sell-offs.
