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On July 12, 2023, onchain data shows the U.S. government transferred 9,800 bitcoins (BTC), worth just over $300 million. These bitcoins originally came from James Zhong’s Silk Road hack. In March, the Department of Justice also moved a similar amount of bitcoins associated with Silk Road.
About 9,800 BTC from Silk Road was moved in two transactions on Wednesday, reportedly sent to wallets controlled by Coinbase. At the time of writing, the funds held by the U.S. government are worth $302 million, based on the day’s BTC exchange rates.
The bitcoins came from James Zhong, the convicted Silk Road hacker. At the time of his arrest, federal authorities seized about 51,351.89785803 bitcoins on three separate occasions, along with a collection of precious metals and $661,900 in cash.
Last March, the government sold 9,861 bitcoins for just over $200 million. The onchain activity four months prior was also detected by onchain observers and blockchain parsers. It’s speculated that all the BTC transferred from Zhong’s stash has been sold on Coinbase.
The selling through Coinbase is unusual as the U.S. government typically auctions off BTC with assistance from the U.S. Marshals. For example, bitcoins seized from Ross Ulbricht in the Silk Road case were auctioned, with investors like Tim Draper purchasing some of the coins. Only recently has the government started moving cryptocurrency to spot exchanges.
