U.S. moves $240m Silk Road Bitcoin to Coinbase

Bitcoin fell 2% after the U.S. government moved 3,940 Bitcoin seized from a Silk Road vendor.

Bitcoin (BTC) came under selling pressure as the U.S. government transferred $240 million worth of crypto to a Coinbase Prime Address. Arkham Intelligence said the 3,940 BTC sent to Coinbase was originally forfeited from Silk Road vendor and narcotics dealer Banmeet Singh in a January trial. 

Silk Road was a dark web marketplace created by Ross Ulbricht in 2011. The Federal Bureau of Investigation (FBI) arrested Ulbricht in 2013 and shut down Silk Road. Later, in 2022, U.S. law enforcement confiscated around 50,000 BTC. Authorities have also seized Silk Road BTC on several occasions.

The wallet linked to U.S. authorities moved $2 billion in BTC on April 2, sparking similar speculations about selling at the time. Following the Wednesday transaction, the total cryptocurrency market slid down modestly, along with BTC.

Government taps sued exchange for Bitcoin sell-off

In March 2023, the U.S. government offloaded $216 million in BTC on Coinbase’s institutional platform, Coinbase Prime. The platform is the preferred off-ramp vehicle for government liquidations, but regulators have scrutinized Coinbase for violations and illegal business conduct. 

Under chair Gary Gensler, the Securities and Exchange Commission (SEC) charged Coinbase with operating an unregistered securities exchange and unlicensed broker-dealer. 

Coinbase denied the allegations and launched its counterarguments in court, accusing the SEC of denying crypto businesses clear rules and registration processes. As Coinbase and the SEC locked legal horns, the platform continued to service demand from the U.S. government tied to selling BTC.