TLDR
- A U.S. government wallet transferred $2 billion worth of bitcoin to an unidentified wallet on July 29, 2024.
- The bitcoin appears to be from funds previously seized from the Silk Road dark web market.
- The government split the bitcoin into two addresses after the initial transfer.
- The move caused bitcoin’s price to drop below $67,000.
- There is speculation about potential political motivations behind the transfer.
A wallet associated with the U.S. government transferred approximately $2 billion worth of bitcoin to an unidentified recipient. This massive transaction, involving nearly 28,000 bitcoins, has sparked discussions about government handling of seized digital assets and its potential impact on the crypto market.
UPDATE: The U.S. Government has split the $2B Bitcoin into two addresses:
10,000 BTC ($669.35M): bc1qlap8hkt9genaljz5nt2zlehhudx63zlahr2zek
19,800 BTC ($1.33B): bc1qngydl7hmgdtmuqjmtsyj3pcwszv0yn5mj6kz4cWe believe this represents a 10,000 BTC deposit to an institutional… https://t.co/0aULBXGd8P pic.twitter.com/RTwtaqvMmM
— Arkham (@ArkhamIntel) July 29, 2024
According to data from Arkham Intelligence, the transferred bitcoins appear to be connected to funds previously confiscated by the U.S. Department of Justice from the now-defunct dark web marketplace, Silk Road.
This transfer follows a U.S. appeals court mandate from late 2023, which formalized the forfeiture of over 69,000 bitcoins and other cryptocurrencies linked to Silk Road operations.
Shortly after the initial transfer, the government reportedly split the bitcoin into two separate addresses. Approximately 19,800 bitcoins (valued at about $1.3 billion) were moved to one address, while 10,000 bitcoins (worth around $670 million) were sent to another. Arkham Intelligence suggested that the 10,000 bitcoin transfer might represent a deposit to an institutional custody or service.
This movement of funds is not unprecedented. In April, a U.S. government crypto wallet sent nearly 2,000 bitcoins to a Coinbase Prime hot wallet. The U.S. Marshals Service, which is the federal courts’ enforcement arm, announced it is paying Coinbase $32.5 million for custodial services.
The timing of this transfer has raised eyebrows in the crypto community.
It comes just days after former U.S. President Donald Trump, speaking at the Bitcoin 2024 conference in Nashville, promised to create a “strategic national bitcoin stockpile” if re-elected. Trump also reiterated his willingness to commute the sentence of Silk Road founder Ross Ulbricht.
The market reaction to this large transfer was swift. Bitcoin’s price tumbled below $67,000 following the transaction, extending its decline from the $70,000 session high earlier that day. This drop highlights the sensitivity of the crypto market to large-scale movements of digital assets, especially those involving government entities.
Some observers have speculated about potential political motivations behind the transfer. David Bailey, CEO of Bitcoin Magazine, suggested on social media that the move could be an attempt by the current administration to counteract policies associated with Trump, particularly concerning high-profile cases like that of Ross Ulbricht and Silk Road.
Critics argue that if such actions are indeed politically motivated rather than based on fiscal or legal considerations, they could potentially alienate a segment of voters, particularly younger, tech-savvy individuals who are more engaged with cryptocurrencies.
It’s worth noting that even after this significant transfer, the U.S. government still holds a substantial amount of seized bitcoin. Arkham Intelligence reports that the government’s crypto portfolio still contains more than $12 billion worth of bitcoin.
