US Government Transfers $200 Million in Bitcoin to Crypto Platform, Coinbase

The US government has made a significant transfer of Bitcoin to Coinbase, according to data from the cryptocurrency’s blockchain.

Around 49,000 BTC worth roughly $1 billion, from wallets related to seizures of the now defunct darknet marketplace Silk Road, have started moving.

Of this amount, the government sent 9,826 BTC worth $217 million to Coinbase, while an additional 39,175 BTC worth $867 million was transferred to two new addresses that appear to be internally controlled and not linked to any exchanges.

Silk Road, created by Ross Ulbrich in 2011, was shut down in 2013. Ulbrich is now serving a life sentence after being convicted of various charges, including distributing narcotics and conspiracy to commit computer hacking.

The US government seized 51,351 BTC connected to Silk Road after it took down the website, and this recent transfer of Bitcoin raises questions about the government’s plans for these seized assets. It also highlights the ongoing interest of law enforcement agencies in cryptocurrency.

The use of Bitcoin on Silk Road was a controversial aspect of the online marketplace, with many assuming that the top crypto asset enabled fully anonymous transfers that could evade law enforcement. This was not the case, however, as Bitcoin’s blockchain allows for transactions to be traced between addresses.

The impact of the government’s transfer of seized Bitcoin on the wider cryptocurrency market remains to be seen. At the time of writing, BTC is trading at $22,000 after dropping more than 7% over the past week amid a wider cryptocurrency market downturn.

Last month, Coinbase revealed a new product called “Base,” a new layer 2 solution testnet for Ethereum built on OP Stack, a development kit used by layer-2 Optimism.

Base was announced during ETHDenver, a community-led event in which various crypto companies, startups, and leading figures in the space announce new products, support projects and technological innovation, and discuss the crypto landscape while sharing ideas on Web3.