Another switch by the US authorities of initially seized Bitcoin from the infamous Silk Road has sparked widespread hypothesis on Wednesday, August 14. Blockchain analytics agency Arkham reported yesterday that 10,000 Silk Road BTC, valued at roughly $593.5 million, have been transferred to Coinbase Prime, a platform used primarily for institutional buyers.
According to Arkham’s post on X: 10,000 Silk Road BTC ($593.5M) moved to Coinbase Prime. Wallet bc1ql acquired 10K BTC from a recognized US Government pockets 2 weeks in the past. This BTC has simply been despatched on to 33J, a Coinbase Prime deposit pockets.”
Is The US Gov Selling Bitcoin?
This transaction comes on the heels of a June announcement from the US Marshals Service (USMS), a part of the Department of Justice, detailing a brand new partnership with Coinbase Prime to offer custody and superior buying and selling companies for the company’s “Class 1” (giant cap) digital property. The group is torn over whether or not these strikes signify the promoting of the Bitcoin or merely a switch for custody functions. Thus, many speculated that the US gov shouldn’t be promoting.
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However, Scott Johnsson, a finance lawyer and basic associate at Van Buren Capital, expressed a definite view in the present day, arguing that the transaction indicators a definitive sale of the seized assets by the US authorities. Johnsson remarked:
“Yes, US Marshal Service (USMS) is almost certainly selling silk road Bitcoin […] USMS has been sending BTC to a custodial address required by the terms of the servicing agreement […] Given the agreement requires USMS assets remain completely segregated, whenever a transfer is ultimately made to CB prime (or other commingled exchange address), you can be sure USMS has already sold or is selling imminently.”
Johnsson additional supported his declare by referencing the DOJ’s Office of Inspector General (OIG) report and the crypto companies settlement RFP, which stipulate the speedy liquidation of property inside 5 enterprise days of forfeiture and the need of segregated pockets addresses to forestall co-mingling with different property.
It states: “The USMS intends to resolve this issue using its planned cryptocurrency services contract, which will require the contractor to liquidate cryptocurrency within 5 business days of the asset being forfeited.”
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Johnsson anticipates that formal affirmation of those gross sales won’t emerge till the publication of the DOJ’s Asset Forfeiture Program FY2024 report in January. However, the unfolding occasions might present earlier indications as extra particulars change into obtainable by official channels or subsequent asset actions.
“Official confirmation will definitively come (at the latest) upon the DOJ’s Asset Forfeiture Program FY2024 report in January, if not earlier. I also don’t think it’s a coincidence this began in earnest following the Trump speech.”
Users on X expressed their confusion relating to Johnsson’s evaluation. Rodeo queried: “These coins were supposed to be sold by the end of last year[…] You’re saying the act of transferring these coins to Coinbase from their current address is enough to imply selling because the Coinbase addresses are not completely segregated addresses?”
Responding to those considerations, Johnsson clarified: “Not necessarily Coinbase alone (there’s an interim segregated custody step), but once they hit commingled addresses it’s reasonable to infer they’re sold. And yea, there was a backlog of forfeited BTC that was supposed to be sold already. Finalizing the services agreement appears to have been (at least part of) the hold up.”
Notably, the newest BTC transaction by the US authorities comes only a few weeks after Republican presidential candidate Donald Trump proposed to ascertain a “strategic national Bitcoin stockpile” on the Bitcoin 2024 convention. After that, rumors emerged that Democrats below the lead of Kamala Harris might empty the BTC holdings by the US authorities from confiscations. While Harris pleads to take a extra pro-crypto stance, a number of consultants refuse this declare, based mostly on the newest actions by her.
At press time, BTC traded at $59,336.
Featured picture created with DALL.E, chart from TradingView.com
