US Government Transfers $2B Silk Road Bitcoin to Coinbase

The US government recently executed a noteworthy transaction involving the transfer of 30,175 Bitcoin (BTC), valued at approximately $2 billion, to a wallet linked to cryptocurrency exchange Coinbase on April 2. 

Blockchain data reveals that a wallet associated with the US Justice Department initiated a transaction of 0.001 Bitcoin to a Coinbase Prime address, possibly as a test transaction. 

Subsequently, the same wallet transferred 30,174 BTC, roughly equivalent to $2 billion at the time, to a new address. There has been one block confirmation for the transaction so far. Transactions typically require multiple confirmations before they are confirmed on exchanges.

However, according to Alex Thorn, Head of Research at GalaxyDigital, USG/Silk Road coins were likely already sold and this is a post-trade settlement.

The wallet has been identified as one containing Bitcoin seized from James Zhong, who was convicted in 2022 for charges related to illegally obtained crypto from Silk Road.

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Background on Zhong's Case

James Zhong was involved in the theft of over 50,000 BTC from Silk Road in 2012. In 2021, US authorities raided his property and discovered hard wallets containing Bitcoin, including one found "on a single-board computer submerged under blankets in a popcorn tin."

The majority of the seized cryptocurrency was sent to the same address involved in the recent 30,175 Bitcoin transfer.

The transaction occurred during a significant dip in Bitcoin's price, which fell to a weekly low of $64,500 per BTC before rebounding above the crucial $65,000 support level. This move has prompted the crypto community to speculate about the government's digital asset policy.