Explosive Twist: CryptoQuant CEO Exposes US Govt Transferring Seized Silk Road Bitcoins

Key Points:

• SILKROAD’s seized bitcoins are rumored to be transferred by the US DOJ. CryptoQuant CEO states that it is not moved by the US government.

It is rumored that the Bitcoins of Silk Road seized by the US DOJ are being transferred. Address (bc1qzd8…) transferred 10.298 bitcoins to another wallet and sent 1490 BTCs to the change address. CryptoQuant CEO Ki Young Ju states that “bc1qzd8…” is not owned by the US government, and it is likely to be a label error.

The story began on May 5th when Arkham tweeted that the US Government currently holds over $6 billion in BTC on-chain from three events. These events include the 2020 Seizure from Silk Road, the 2022 Seizure from Bitfinex Hack, and the 2022 Seizure from James Zhong. The BTC from Silk Road is held in a single wallet, while Bitfinex BTC seized by the FBI is held in another.

James Zhong, another individual who hacked Silk Road, was investigated in 2021-2022, with over 50K BTC surrendered to the US Department of Justice. Four different wallets currently hold a total of 51,326 BTC seized from James Zhong in 2022, while the US Government still holds 41.5K BTC in these wallets.

On June 21st, CryptoQuant CEO Ki Young Ju responded to Arkham’s tweet regarding the transfer of bitcoins seized by the US Government. According to Ju, the address ‘bc1qzd8…’ is not owned by the US Government and is not clustered/adjacent to any addresses on US government filings.

The ‘bc1qzd8c…’ seems to be an exchange hot wallet aggregating user deposits. Ju also suggests that the dust BTC was transferred to hot wallets after the US Government seized coins from a crypto exchange.

After Ki Young Ju responded to the claims made by Arkham, the latter took to Twitter and posted an update. They highlighted that the wallet address bc1qzd8 had used for a recent transaction was significant due to its connection with known USG Zhong confiscation addresses. All the transactions occurred within a span of three hours.

Arkham noted that bc1qzd8 sent 10.298 BTC to what they believed was an exchange deposit wallet. Interestingly, this wallet address had been previously utilized for transactions associated with USG forfeiture, as indicated by specific bitcoin amounts seized and cited in a Department of Justice (DOJ) enforcement announcement. Arkham concluded that these connections were strong enough to attribute bc1qzd8 as an additional USG-related wallet.

In response to this, CryptoQuant CEO Ki Young Ju raised doubts, suggesting that the 1.4k BTC mentioned might still be present in the new US gov wallet. He also proposed the possibility that bc1qzd8 could be Coinbase’s hot or cold wallet, indicating that Coinbase might have sent the seized user deposit of 10.298 BTC from their own hot or cold wallet.

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