Silk Road Bitcoin Worth More Than $2 Billion Suspected of Being Sold by the US Government

Key Points:

• The US government has initiated a transaction indicating the potential liquidation of seized Silk Road Bitcoin.
• The transaction, linked to James Zhong’s confiscated Bitcoin, follows a previous sale of over 9,800 BTC by US authorities in March 2023.

The US government has initiated a significant transaction, signaling a potential move to liquidate the remaining Bitcoin confiscated from the infamous online marketplace Silk Road.

US Government Initiates A Massive Transfer Of Silk Road Bitcoin

Data from the blockchain on April 2 revealed that approximately $2 billion worth of Silk Road Bitcoin, previously seized by US authorities, has been transferred to a new address.

The transaction, which followed a minor 0.001 BTC transfer to a Coinbase Prime address, involved the movement of 30,174 BTC from a wallet associated with the US Justice Department. This wallet was linked to Bitcoin seized from James “Jimmy” Zhong, convicted in 2022 for his involvement in unlawfully obtained crypto from Silk Road.

Zhong, who stole over 50,000 BTC from Silk Road in 2012, had his property raided by US authorities in 2021. Among the discoveries were hard wallets containing Bitcoin, including one concealed in a popcorn tin. Most of the Silk Road Bitcoin, including the recent 30,174 BTC transaction, has been sent to the same address.

Bitcoin Market Reacts to Seizure Movement

The timing of this move coincided with a downturn in Bitcoin’s price, dropping to a weekly low of $64,500 per BTC before recovering above the $65,000 support level.

ZachXBT, an on-chain sleuth, highlighted the initial test transaction on social media. Notably, in March 2023, US authorities reported selling around 9,861 BTC seized from Zhong for over $215 million, leaving approximately 40,000 BTC remaining.

Silk Road, infamous for facilitating illicit drug trade, was shut down by the FBI in October 2013, leading to the arrest of its founder, Ross Ulbricht. Ulbricht, convicted of various charges including money laundering and conspiracy, is currently serving a life sentence without parole.