Bitcoin’s price is experiencing a modest decline following news of the U.S. government transferring 3,940 BTC to Coinbase Prime.
The U.S. government has transferred $240 million worth of Bitcoin (BTC) to a Coinbase Prime address.
According to Arkham Intelligence, the 3,940 BTC sent to Coinbase were originally forfeited from Silk Road vendor and narcotics dealer Banmeet Singh during his January trial.
Seizures and Legal Actions
In late 2021, the U.S. Department of Justice (DOJ) seized over 50,000 BTC, valued at $3.4 billion, from the illicit Silk Road marketplace. Approximately five months later, officials sold 9,861 BTC for over $215 million. By July 2023, an additional 9,000+ BTC were sold, leaving the government’s wallet with around 30,000 BTC.
It was later confirmed in court that the U.S. government had seized a total of 69,370 BTC and other cryptocurrencies linked to the Silk Road dark web marketplace. The most recent Bitcoin movement by the authorities occurred in April when they transferred BTC valued at approximately $2 billion.
The U.S. government holds large quantities of Bitcoin acquired through seizures and asset forfeitures. According to Lookonchain, the country possesses 213,546 BTC, valued at approximately $13.07 billion.
Banmeet Singh, the individual linked to the latest transfer, was arrested in 2019 by British authorities in London on drug distribution charges. Extradited to the United States in 2023, he was accused of running a narcotics smuggling network from 2012 to 2017 with distributors across multiple states, including Maryland, New York, and Florida.
As part of his judgment, Singh was forced to surrender over 8,100 BTC, valued at around $150 million at the time, marking the largest cryptocurrency seizure by the U.S. Drug Enforcement Agency (DEA).
Market Impact and Regulatory Scrutiny
The recent transfer had an immediate impact on the cryptocurrency market. Following the Wednesday transaction, the total cryptocurrency market experienced a modest decline, with BTC prices dropping below $60,800. At the writing time, the asset is trading at around $61,000.
Coinbase Prime, the platform used for this latest transaction, has become the preferred vehicle for government liquidations. However, Coinbase itself has faced regulatory scrutiny. Under the leadership of Gary Gensler, the SEC charged the exchange with operating an unregistered securities platform and acting as an unlicensed broker-dealer.
Coinbase has denied these allegations and is contesting them in court, arguing that the SEC has failed to provide clear regulations and registration processes for crypto businesses.
Silk Road, a dark web marketplace created by Ross Ulbricht in 2011, remains a significant part of the history of Bitcoin and darknet markets. The Federal Bureau of Investigation (FBI) arrested Ulbricht in 2013, leading to the shutdown of Silk Road.