The US government has transferred $240 million worth of Bitcoin to the Coinbase Prime address.
According to Arkham Intelligence, the 3940 Bitcoins sent to Coinbase were initially seized from the Silk Road vendor and drug dealer Banmet Singh in a trial in January.
Seizures and legal action
At the end of 2021, the US Department of Justice confiscated over 50,000 BTC worth $3.4 billion from the illegal Silk Road market. About five months later, the government sold 9861 BTC for $215 million. By July 2023, they had sold over 9000 BTC, leaving about 30,000 BTC in the government’s wallet.
It was later confirmed in court that the US government had seized a total of 69,370 Bitcoins and other cryptocurrencies related to the Silk Road dark web market. The most recent Bitcoin transaction by the authorities occurred in April, when they transferred approximately $2 billion worth of Bitcoin.
Update: US government sends $240 million BTC to Coinbase Prime
The US government has just sent 394 million BTC ($240 million) to Coinbase Prime. These Bitcoins were originally seized from drug dealer Banmet Singh and confiscated in a trial in January 2024. Transaction https://t.co/hZ1CwqWCmF pic.twitter.com/9t6k8Wdizq – Arkham (@ArkhamIntel) June 26, 2024
The US government holds a large amount of Bitcoin obtained through seizures and asset forfeitures. According to Lookonchain data, the country owns 213,546 BTC, worth about $13.07 billion.
Banmet Singh, the individual associated with the most recent transfer, was arrested by British authorities in London in 2019 on drug distribution charges. He was extradited to the US in 2023 and accused of operating a drug smuggling network with dealers in multiple states, including Maryland, New York, and Florida, from 2012 to 2017.
As part of the judgment, Singh was forced to hand over over 8100 Bitcoins, valued at approximately $150 million at the time, which was the largest amount of cryptocurrency seized by the Drug Enforcement Administration (DEA).
Market impact and regulatory scrutiny
The recent transfer has had a direct impact on the cryptocurrency market. After Wednesday’s trading, the overall cryptocurrency market saw a slight decline, with the price of Bitcoin falling to below $60,800. At the time of writing, the asset’s trading price is around $61,000.
The platform Coinbase Prime, used for this latest transaction, has become the government’s preferred tool for liquidation. However, Coinbase itself is also facing regulatory scrutiny. Under Gary Gensler’s leadership, the US Securities and Exchange Commission has accused the exchange of operating an unregistered securities platform and acting as an unlicensed broker-dealer.
Coinbase has denied these allegations and challenged them in court, arguing that the SEC has failed to provide clear regulatory and registration processes for cryptocurrency businesses.
Ross Ulbricht’s dark web market “Silk Road,” created in 2011, continues to be an important part of Bitcoin and dark web market history. The FBI arrested Ulbricht in 2013, leading to the closure of Silk Road.