In recent days, more than 50 thousand bitcoin (BTC) have been linked to addresses of the US government ‘on the move’. Nearly ten thousand of these have been sent to the crypto exchange Coinbase, reports analysis firm PeckShield. The bitcoins were seized by US authorities in 2021 from Silk Road, a dark web marketplace.
#PeckShieldAlert 49k $BTC (worth $1 Billion) from wallets related to US Government law enforcement seizures have been transferred to #Coinbase (~9.8k $BTCworth $217M), bc1qf2…fsv (30k $BTC) & bc1qe7…rdg (9k $BTC) #SilkRoad pic.twitter.com/4MzlvDzkut
— PeckShieldAlert (@PeckShieldAlert) March 8, 2023
9 thousand bitcoin to Coinbase
Silk Road was an illegal online marketplace founded in 2011. It was one of the first online marketplaces to accept bitcoin payments. The US authorities confiscated large amounts of bitcoin from the platform several times, which they then auctioned off from time to time.
The movement of bitcoin, and especially the transaction to Coinbase, has fueled speculation that the US government is planning to dump another large amount of bitcoin.
Although only a small portion of the 50 thousand bitcoin was sent to Coinbase, it is still a significant amount. According to certain speculation such a ‘dump’ could cause a lot of selling pressure for the bitcoin price, which does not look too strong at the moment.
Still, others have doubts about a possible sale, because it would be a strange time to sell at current prices. However, it is doubtful whether the US authorities take the exchange rate into account when selling confiscated assets.
Is dark web trading still relevant?
In the early days of crypto, cryptocurrencies were regularly used for illegal purchases on the dark web. People still think that crypto is mainly used for such illegal practices. While some of this is true, the relevance of illegal trade is a lot less than it once was.
A recent study by Chainalysis showed that the revenues from dark web trading will halve in 2022 compared to 2021. A big reason for this was the dismantling of Hydra, a former Russian illegal online marketplace. Whether this drop in illegal online trade is temporary or permanent remains to be seen.