US Government Moves $1 Billion of Seized BTC from Silk Road, Raising Fears of Liquidation

The DOJ may have sent some of the funds seized from Silk Road to Coinbase, but that doesn’t mean they’re about to be liquidated.

$1.08 billion in BTC

It seems that some of the Silk Road bitcoins are on the move.

On-chain data shows that a Bitcoin wallet address associated with the US government moved approximately 49,000 BTC yesterday, a sum worth approximately $1.08 billion at the time of writing.

The address, which starts with BC1QMXtransferred around 9,000 BTC ($199 million) to an address starting at BC1QEthen 30,174 BTC ($667 million) to a second address starting at BC1QFand 9825 BTC ($217 million) to a third address from 367YO. Just over 825 bitcoins ($18 million) remain at the original address.

According to chain security company PeckShieldthe original address belongs to the US government, which uses the wallet to store some of the 50,676 BTC ($1.12 billion) that attorney from Silk Road exploiter James Zhong in November 2021. Zhong obtained the sum by exploiting the darknet’s takedown mechanism in September 2012. He pleaded guilty to one count of wire fraud in November 2022.

The first two addresses, which received a combined total of 39,174 BTC, were created recently. However, PeckShield identified the third address (367YO) as belonging to US-based cryptocurrency exchange Coinbase. Bitcoin on-chain analytics company glass node and chain analysis company lookonchain both echoed PeckShield’s findings. Crypto Briefing was unable to independently verify ownership of the wallet.

The moving funds sparked speculation on Twitter that the Justice Department may be trying to sell some of the bitcoin it sent to Coinbase. However, that seems unlikely, as the US government has historically chosen to liquidate its bitcoin holdings through public auctions.

Disclosure: At the time of writing, the author of this article owned BTC, ETH, and various other crypto assets.