Over the past 10 years, US law enforcement has confiscated thousands of bitcoins that were part of various Silk Road transactions. On many occasions, the US authorities put some of these assets up for auction, where investors could legally acquire BTC.
For the record, Silk Road was an online black market, something like the Darknet. The platform launched in 2011. Its founder was Ross Ulbricht using the pseudonym “Dread Pirate Roberts”. The service was one of the first to accept bitcoin payments. As you can guess, U.S. law enforcement finally caught up with Ulbricht, confiscated the bitcoins he owned, and the platform shut down in 2013. Confiscated digital assets were repeatedly put up for auction in the following years .
Now the subject of these measures is back, as research firm PeckShield noted that on March 7, more than 50,000 were transferred from government wallets. bitcoins to 3 different addresses. The value of the coins transferred is approximately $1 billion. Some of them were also uploaded to the Coinbase exchange.
#PeckShieldAlert 49k $BTC (worth $1 Billion) from wallets related to US Government law enforcement seizures have been transferred to #Coinbase (~9.8k $BTC, worth $217M), bc1qf2…fsv (30k $BTC) & bc1qe7…rdg (9k $BTC) #SilkRoad pic.twitter.com/4MzlvDzkut
— PeckShieldAlert (@PeckShieldAlert) March 8, 2023
The assets from the three transfers appear to be internal migrations of funds. However, one might wonder why the 9,861 BTC was sent to Coinbase. The other two tranches amount to 30,000. BTC and 9 thousand. BTC.
What do the government’s moves mean and what could be the effect?
The question arises whether the movements of bitcoins that are held by the government are an indication of a willingness to sell these assets, or could it be simple diversification into different wallets? It is true that less than 10,000 were transferred to the exchange. bitcoins, but the overall value of the assets that have been put in motion has been met with mixed reactions from the cryptocurrency community.
One Twitter user theorized that if these coins were sold by US agencies, there could be huge selling pressure on the market.
???? Have to wonder if that relentless Bitcoin selling pressure right now is the US government finally selling off all that #SilkRoad Bitcoin… If so that would be a cool $1 billion that the market has to absorb, only payable in demonic fiat. (h/t @ThegreatLambiny) https://t.co/770uwO49Kr
— ⚯ M Cryptadamus ⚯ | @email@example.com (@Cryptadamist) March 8, 2023