Nearly $600M of Silk Road Bitcoin Hits Coinbase Prime, but Not Necessarily to Sell

The U.S. government Wednesday moved 10,000 Silk Road-related seized bitcoin {{BTC}} to Coinbase Prime, the exchange giant's institutional platform, blockchain data by Arkham Intelligence shows.

The crypto wallet that initiated the transfer received the roughly $600 million worth of bitcoin two weeks ago from a wallet tagged as the "U.S. Government: Silk Road DOJ Confiscated Funds."

BREAKING: 10K Silk Road BTC ($593.5M) moved to Coinbase Prime

Wallet bc1ql received 10K BTC from a known US Government wallet 2 weeks ago. This BTC has just been sent on to 33J, a Coinbase Prime deposit wallet. pic.twitter.com/kNLsiJzL95

— Arkham (@ArkhamIntel) August 14, 2024

Deposits to an exchange usually signal intention to sell the assets, but in this case the transfer may have happened for custody reasons.

The U.S. Marshals Service, a division of the Department of Justice (DOJ) announced a partnership last month with Coinbase Prime to "safeguard and trade" large-cap digital assets. There's little insight into what exactly happens with the tokens after landing on a centralized platform.

Bitcoin tumbled to $59,000 from $61,000 earlier during the day, but the lame price action happened before the transaction took place.

The DOJ announced in 2022 that it seized over 50,000 BTC and arrested James Zhong, who pleaded guilty to wire fraud after the government alleged he manipulated the transaction system of dark web market Silk Road in 2012.

The last confirmed sale of Silk Road assets by the government was in March 2023, when it unloaded 9,861 coins for $216 million, according to court filings. The government laid out plans in the filing to sell the remaining assets in four tranches during that year, but there wasn't follow-up communication about any sales since then.

Wallets linked to the U.S. government currently hold $12 billion of BTC and smaller amounts of other seized crypto, per Arkham.