The U.S. government appears to be selling more Bitcoin, as on Wednesday, a known federal wallet address sent 3940 Bitcoin (worth $240 million) to Coinbase.
Blockchain detectives immediately identified the transfer to the institutional platform Coinbase Prime, emphasizing that the blockchain transfer at 1 pm Eastern Time cost only $18.
Experts have differing opinions on where the government obtained the transferred Bitcoin.
According to the Telegram channel of on-chain detective ZachXBT, these funds are part of the Bitcoin recovered from the “Silk Road hacker”. After the notorious dark web market closed in 2013, the Department of Justice tracked down the hacker and seized 50,676 Bitcoin, which the government has been selling in bulk ever since.
In addition to Silk Road, many of the government’s coins were recovered in 2022 from the 2016 Bitfinex hacker Razzlekhan. However, blockchain data platform Arkham Intelligence stated that the coins stolen today did not come from these two sources.
The company wrote on Twitter on Thursday: “This BTC was originally seized from drug dealer Banmet Singh, confiscated during a trial in January 2024.”
Banmet Singh is a drug lord who earlier this year admitted to running an international drug trafficking ring from his home for several years. As part of a plea agreement, Singh agreed to surrender cryptocurrency worth $150 million – a value that has since increased due to the rise in Bitcoin’s price.
According to Arkham, the government still holds $13 billion worth of Bitcoin, making it one of the largest Bitcoin owners on Earth, after MicroStrategy.
Similar to the U.S. government, Germany sold $170 million from its $2.8 billion Bitcoin reserve last week. Arkham’s data shows that on Tuesday, the company transferred tens of millions of dollars to Kraken and Coinbase exchanges.
The government’s sales have added to the selling pressure from Bitcoin miners and whales this month, while on-chain analysis shows that the new demand for Bitcoin has dried up. At the time of writing, Bitcoin’s trading price is $60,775, a 13% decrease for the month.
Edited by Ryan Ozawa.