US Government Moves Over 9K BTC To 101 Addresses

The U.S. government recently moved 9,825 Bitcoin tokens from three wallets holding confiscated funds linked to the defunct online market Silk Road.

The U.S. government has transferred 9,825 Bitcoin (BTC) tokens, worth about $297 million, from three wallets that held some of the confiscated funds from Silk Road, the notorious online black market shut down in 2013.

According to Spot-on-Chain, a blockchain data surveillance platform, the massive movement of bitcoins involved two separate transactions.

🚨🚨 9,825 $BTC (~$297M) was moved by the US Government from 3 wallets that hold seized Silk Road Bitcoin, around 12 hours ago.

Notably, 8,200 $BTC ($248M) was moved to a new address 361yogPsa, and then distributed to 101 recipients (each received 79.2 $BTC). pic.twitter.com/4hEbLN71Rc

— Spot On Chain (@spotonchain) July 13, 2023

The first transaction moved 8,200 BTC valued at $248 million to a new address. Then it divided them equally among 101 recipient addresses, each receiving 79.2 tokens.

In the second transaction, the government divided 1,625 BTC ($49.24 million) into two fresh wallets, with one getting 1,118.73 BTC ($33.87 million) and the other getting 506.55 BTC ($15.34 million). These wallets have not made any more moves.

These assets came from Silk Road, a web market that ran on the dark net and let users trade illicit products and services using Bitcoin as a payment means.

Notably, the latest fund movements come barely four months after the U.S. government dumped 9,861 BTC linked to Silk Road in March. The assets, worth $216 million then, were part of over 50,000 BTC confiscated by the government last November.

Per Nov. 7, 2022, release from the U.S. Attorney’s Office for the Southern District of New York; the government seized the 50,000 BTC tokens from devices belonging to James Zhong in November 2021. A year later, Zhong pleaded guilty to unlawfully procuring the assets on Silk Road back in 2012.

The Silk Road Saga

Using the alias DPR, Ross Ulbricht started Silk Road in February 2011. The site soon became a hotspot for illegal acts, such as selling drugs, cyberattacks, washing money, and contract killing.

But U.S. officials also noticed Silk Road’s fame and started a joint-agency probe to find and capture Ulbricht and his partners. They stormed Ulbricht’s flat in San Francisco and took him in on accusations of leading a crime syndicate in October 2013. They also confiscated his computer and closed the Silk Road site.

The U.S. government auctioned off 29,656 BTC confiscated from Silk Road’s servers in July 2014. In November 2020, the government seized another batch of BTC, worth about $1 billion at the time, from a wallet that allegedly belonged to Ulbricht or a Silk Road hacker. 

Each time the government moves Bitcoin assets linked to Silk Road, concerns emerge among market participants. A large-scale dump of these assets will likely impact the crypto market. As of press time, it remains unclear what the government plans to do with the recently-moved tokens.