On Wednesday, the U.S. government transferred around 10,000 bitcoins (BTC), worth approximately $600 million, to Coinbase Prime, an institutional platform operated by the major exchange Coinbase, according to blockchain data provided by Arkham Intelligence. The bitcoins were initially transferred to a government-controlled wallet about two weeks earlier from another wallet identified as holding funds confiscated by the U.S. Department of Justice (DOJ) from the Silk Road case.

While deposits to exchanges typically indicate an intent to sell, it’s unclear if that is the case here. This transfer might be related to custody or safekeeping rather than an immediate sale. In fact, the U.S. Marshals Service, a branch of the DOJ, announced a collaboration with Coinbase Prime last month to manage and secure large-scale digital assets. However, there is little transparency regarding what happens to the bitcoins once they are deposited on the exchange.

Interestingly, Bitcoin’s price dipped from $61,000 to $59,000 earlier in the day before the transfer occurred, but this price change was not directly linked to the transaction.

Sub-heading 2: Background on Silk Road Case and Seized Bitcoin

The DOJ first announced in 2022 that it had seized more than 50,000 BTC from James Zhong, who was arrested and pleaded guilty to wire fraud. Zhong was accused of exploiting the transaction system on Silk Road, a notorious dark web marketplace, in 2012. This bitcoin seizure was one of the largest in history, and the U.S. government has been slowly selling off the assets.

The last known sale by the government took place in March 2023, when it sold 9,861 bitcoins for $216 million, according to court records. The government had indicated that it planned to sell the remaining Silk Road assets in four phases throughout the year. However, there hasn’t been any further public communication regarding these sales since then.

Currently, wallets associated with the U.S. government are reported to hold around $12 billion worth of BTC, along with smaller amounts of other cryptocurrencies, according to Arkham. This massive sum represents the ongoing efforts by U.S. authorities to manage and liquidate seized digital assets in the aftermath of criminal investigations like those related to Silk Road.