According to on-chain data by Arkham Intelligence, the US government sent $593.5 million worth of BTC related to the seized Silk Road bitcoins to 33J, a Coinbase Prime deposit wallet. Coinbase received the funds through an intermediary, not directly from the US authorities.

Approximately two weeks ago, the United States authorities, via an address explicitly labeled as ‘U.S. Government: Silk Road DOJ Confiscated Funds,’ initiated a transfer of 10,000 Bitcoin (BTC) to an unidentified recipient address. Subsequently, this BTC stash has been redirected to a wallet managed by Coinbase.

BREAKING: 10K Silk Road BTC ($593.5M) moved to Coinbase Prime

Wallet bc1ql received 10K BTC from a known US Government wallet 2 weeks ago. This BTC has just been sent on to 33J, a Coinbase Prime deposit wallet. pic.twitter.com/kNLsiJzL95

— Arkham (@ArkhamIntel) August 14, 2024

U.S. Marshals Service Partners with Coinbase for Digital Asset Custody

The recent transfer of funds to Coinbase in the U.S. is most likely related to the USMS’ partnership with the exchange. 

In July, the U.S. Marshals Service (USMS), a division of the U.S. Department of Justice that specializes in seizing and managing forfeited assets, chose Coinbase to provide safekeeping and trading services to its large digital assets.

Is the US Government Trying to ‘Pull Another Germany’?

The government’s recent transfer of BTC to Coinbase is not the first time as an April report revealed that the US authorities transferred $2.1 billion worth of Bitcoin (30,100 BTC) to the Coinbase deposit account.

The feds initially made a test transfer of 0.001 BTC ($69) to the account before making the $2.1 billion transfer. The transfer caused Bitcoin’s value to dip, dropping below $65,000 at the time of the incident before reviving a little to $65,200.

A June report also showed the U.S. government liquidating more assets from its holdings. The authorities transferred about 3,940 BTC (equivalent to $240 million) to Coinbase through a recognized federal wallet address.

A succession of bitcoin outflows from US government holdings has raised eyebrows, with some speculating a ‘German-style’ strategy is in play.

The German government sold 3,846 BTC, marking it the last batch of sales. The authorities sold about 50,000 Bitcoins, through a 23-day sale, from June 19 to July 12. The series of outflows affected the market as Bitcoin fell from $63,000 to $54,000 during that period.