Feds transferred BTC from seized Silk road wallet to Coinbase

[Sunderland]

I posted this on other thread:

I think 209K BTC is too much, if we look at the total of BTC confiscated by the US Gov:
Silk Road  69,369 BTC
Bitfinex Hack 94,643 BTC
James Zhong  - 51,326 BTC

In total around 215K of BTC and the estimate balance now is 164K - dang it almost 1% of all BTC currently in circulation.
Blackrock and MicroStrategy might be buy more cheap bitcoins soon ...

source: https://dune.com/21co/us-gov-bitcoin-holdings

With the data above, I think the US Gov only have 67K BTC left after deducting the 94,643 BTC owned by Bitfinex.
My question now is, why dont they just sell it all at once? or maybe they are still waiting for the BTC price to hit $100K? lol.

[examplens]

That sounds more like declaration of War on Bitcoin 😲
At the very least this is a significant market manipulation attempt and as far as I can tell this would be the first time the US regime is selling seized coins on a centralized exchange instead of auctioning them off-the-market.

The only question remaining is: are they starting to feel threatened by Bitcoin?

However if affects the market, it will certainly recover. What is good, it is better to happen as soon as possible and to remain without the possibility of manipulation.

How accurate are these data?
According to Arkham Intelligence, the US Government account holds much more, 212.862K BTC or $14.42B


https://platform.arkhamintelligence.com/explorer/entity/usg

[Darker45]

I don't expect a massive dump. I even think massive dump is an exaggeration. It will have an effect if sold at once, of course, but Coinbase handled $1.2 billion in BTC/USD alone for the past 24 hours. So, $131 million is not even a tenth of Coinbase's BTC/USD pair.

Also, Coinbase has Coinbase Prime, their OTC exchange where institutions are making deals probably in hundreds of millions, if not billions. This amount coming from the US government might end up there. In which case, it won't be shaking the market much.

You're right, they didn't sold it at once so I guess they're also having that problem that every holder is problematic with and that's about selling in batches because we have no choice as the exchanges will question us. But this is not a problem to them, there is a tendency that they're doing it in batches so not to get as much attention that it will be but if that's the reason, they're not good in hiding as they've been already found out doing this massive tx.

Yeah, they liquidated those coins in batches. It might not have been out of care for the market; it could have simply been their desire to maximize the proceeds, or simply to stay inconspicuous. But they're not necessarily hiding all these things. After all, they will still file reports as to these activities. And these documents are probably not confidential at all.

So, I'm not at all bothered by this $131 million that would hit the market anytime soon.

[SamReomo]

I have gone through it and what came to my mind is somewhat strange. I believe feds and US government don't really need to sell their holdings directly to the public or via exchanges because these days there are so many investment companies that are willing to accumulate Bitcoin and if feds get a good quote from those companies then they can sell the seize Bitcoin without casing any dip to the market.

94,600 Bitcoin still means a lot and if all of those are sold at market rates then the price of Bitcoin can dump a lot for short term. The 94,600 Bitcoin may not dump it that much but the sell orders from bots may dump it even further. That will also be a good thing for the exchanges as they'll make a lot of money due to liquidations.

[adaseb]

I am just surprised they haven’t sold these holdings earlier. When was the last time they sold? About a year ago. Price went higher, why didn’t they sell more.

Why didn’t they sell everything during the 2014, 2017 and 2021 bitcoin bull markets. Very strange that they kept them all these years while the trial ended a long time ago.

[CODE200]

I am just surprised they haven’t sold these holdings earlier. When was the last time they sold? About a year ago. Price went higher, why didn’t they sell more.

Why didn’t they sell everything during the 2014, 2017 and 2021 bitcoin bull markets. Very strange that they kept them all these years while the trial ended a long time ago.

Didn't they do an auction of those bitcoins and a prominent tech bro won the bidding? Or I'm remembering a different person because I believe that it's been auctioned and not sold by the Feds themselves, they're probably going to put that bitcoin that they've moved to Coinbase to do another auction, I think they're not allowed to use that bitcoin directly because technically it's an evidence involved in a crime or illegal activity so if they ever do some kind of spoils and they sold that bitcoin themselves, they're probably going to face a lot of problems that would make them either get a lower budget or worse, the head getting out of the office.

[FanEagle]

That's good, it is actually in a place that can be trusted instead of just their own whatever storage that we didn't know. A lot of people fight for "freedom" for silk road and pirate, but the reality is that there wasn't really any legal limit to what you can do there, which is why it was 100% correct that he was caught and jailed.

What you need to understand is that dark market has nothing that you can't buy, you could literally hire mercenaries to kill someone and that was one of the things he did as well. This is why it is not like "what did he do, he just let people sell weed to each other!!" but that wasn't the case, if that was the only case, he wouldn't be jailed this much, he provided a marketplace to hire so many more illegal things.

[GbitG]

Yeah there is nothing to worry about that. As far as I know, they have announced it in the past that they are going to sell the seized Bitcoins in portions within a certain period, and it's probably one of the portions they are going to sell as they did in the past, and we haven't seen much of an effect on the price in the past as well.

They are also not going to dump all the coins they hold at once because they aren't doing this for money last time when they sold a portion of the coins, the price of Bitcoin was pretty low, and if they were doing it only for the money and profits, they could wait for the price to go up and then could sell the coins.

Neither this, nor any of their selling in the future will affect the price or the market in any way, besides, there are more Bitcoins bought and sold than that amount of a daily basis, so I don't think this will have any significance in front of that.

[tabas]

With the data above, I think the US Gov only have 67K BTC left after deducting the 94,643 BTC owned by Bitfinex.
My question now is, why dont they just sell it all at once? or maybe they are still waiting for the BTC price to hit $100K? lol.

Because they probably can't, just as the institutions can't sell them all at once is because not all of these exchanges have plain cash ready and they're just like middlemen of most traders and investors globally. But possible, they're going to do the next batches when BTC hits $100k or more.

Yeah, they liquidated those coins in batches. It might not have been out of care for the market; it could have simply been their desire to maximize the proceeds, or simply to stay inconspicuous. But they're not necessarily hiding all these things. After all, they will still file reports as to these activities. And these documents are probably not confidential at all.

So, I'm not at all bothered by this $131 million that would hit the market anytime soon.

Right, they can't hide these activities as it will look questionable and all of these sell offs were done publicly and sure that in the future when they do the next batches, they'd do a report and might take the media on a next level to do some manipulations that will be not only in their favor but with the other big players.

I have gone through it and what came to my mind is somewhat strange. I believe feds and US government don't really need to sell their holdings directly to the public or via exchanges because these days there are so many investment companies that are willing to accumulate Bitcoin and if feds get a good quote from those companies then they can sell the seize Bitcoin without casing any dip to the market.

It's possible that there could some ruling that they have to follow and standard procedure if the btc's are seized as they can't just sell it on an institution directly and that's why there were auctions. But yeah, why didn't they do an auction for this one or they've just chosen the quicker path and quick cash going onto their hands.

I am just surprised they haven’t sold these holdings earlier. When was the last time they sold? About a year ago. Price went higher, why didn’t they sell more.

Why didn’t they sell everything during the 2014, 2017 and 2021 bitcoin bull markets. Very strange that they kept them all these years while the trial ended a long time ago.

That makes sense but who knows if the feds or whoever is on the higher ups of his/her position there understands truly the concept of Bitcoin as a volatile asset and a store of value and that's affecting their decision as consensus when and whether to sell or not.

That's good, it is actually in a place that can be trusted instead of just their own whatever storage that we didn't know.

As much as they can hold vast of it, they can also hold it on their own with their trust and confidence but this is all big money that was seized and value keeps on increasing from the time they've seized it but possibly, they just choose not to hold them anymore and let Coinbase do all the job for keeping them as they've sold it to them, preparing for the bull I guess.

Yeah there is nothing to worry about that. As far as I know, they have announced it in the past that they are going to sell the seized Bitcoins in portions within a certain period, and it's probably one of the portions they are going to sell as they did in the past, and we haven't seen much of an effect on the price in the past as well.

They are also not going to dump all the coins they hold at once because they aren't doing this for money last time when they sold a portion of the coins, the price of Bitcoin was pretty low, and if they were doing it only for the money and profits, they could wait for the price to go up and then could sell the coins.

Neither this, nor any of their selling in the future will affect the price or the market in any way, besides, there are more Bitcoins bought and sold than that amount of a daily basis, so I don't think this will have any significance in front of that.

I didn't know that, that they've mentioned it that they're going to sell it but if they've announced it. Some probably have taken that advantage as a signal upon selling it to Coinbase on exact date that they've announced it. So this kind of disposal that the feds are doing are plainly just for disposal but I doubt it that they're not doing it for profits. Because whether they sell now or earlier, they're still in profit as the btc's seized were just freely taken by them.

[The Cryptovator]

They will sell it today or tomorrow. Unless they sell it at once, the market shouldn't react much. Because Bitcoin already pumped a lot and due to their sale, it won't be a be a massive dump. But if they decide to sell everything at once, then we may see a massive dump. Its just not for sale, but it will create a FUD, and investors will panic. I hope institutional investors will back massive sales. They are constantly accumulating Bitcoin, even at its high price. So buy-in demand is pretty high right now. Unless traders panic, Feds won't dump the bitcoin for selling it. 

[yazher]

If they gonna dump this huge amount of bitcoins, then surely the price will drastically drop and that will create a huge chance for anyone who is waiting for the price to get lower and wants to invest to join the potential bull run after bitcoin halving this year. Did they get those bitcoins after they caught the criminals or did they somehow find a way to recover it from them without any interactions?
If this is how good they are, then the hackers are no longer a threat to most of us and we can now easily ensure that we can keep our bitcoins more securely than ever before.

[Husires]

Bitcoin is classified as a commodity and not a security, it must be allocated just as goods are disposed of by displaying them in an open auction and giving the opportunity to anyone who wants to buy according to the auction price. why did the government decide to sell them directly by creating an account in Coinbase, and why now, and why not all seized?

[karabiber]

The US government is always doing this kind of speculation and trying to regulate the market. The government usually sells gradually and I don't think it affects the market much. I don't think it's in the government's interest that the market is in a downturn, but they are always ready to sell bitcoin at any time and under any circumstances. Usually, when the market is in a negative mood, this news comes out and they try to deepen the decline in Bitcoin. But they are wrong, and Bitcoin is always capable of defeating speculation. Bitcoin is also a finite asset and although it is subject to negative speculation, time always works in Bitcoin's favor.

[kryptqnick]

Considering how much and how fast the price is rising, even hundreds of millions of dollars won't make a significant difference. Still, I think it's better to auction seized funds from illegal operations instead of dumping them on exchanges. Auctions can start around market price but actually push the price up, with some people having a desire to have those specific coins. I know it goes against fungibility of Bitcoin, but it could be better both for the price and for the US government: the price wouldn't be affected, and the US government would get more funds.

[Ultegra134]

I am just surprised they haven’t sold these holdings earlier. When was the last time they sold? About a year ago. Price went higher, why didn’t they sell more.

Why didn’t they sell everything during the 2014, 2017 and 2021 bitcoin bull markets. Very strange that they kept them all these years while the trial ended a long time ago.

That's true. I would also have expected them to be dumped a lot sooner; it seems they're keen on holding them as well. Now, to address the issue of a potential mass sellout, from how I see things, $2 billion worth of Bitcoin isn't anywhere close enough to crash the market. Perhaps they could put a dent in Bitcoin's price, but it'll only be temporary. I wouldn't expect any massive drops in price either, because there were some users who were hoping for a fallback to $50,000, which is highly unlikely to be caused by the sale of the seized Bitcoin.

[avikz]

I was looking if someone has posted this news already but I'd share it here. The title speaks for itself but I'll just highlight the bullets from the article.

• The US government transferred some of its bitcoin stash to Coinbase this week.
• The government owns about $2 billion worth of bitcoin in a wallet seized from the dark web's Silk Road.
• About 2,000 bitcoin were transferred to Coinbase, worth about $130 million.

On Tuesday, the US government transferred $65 worth of bitcoin to a wallet address held at Coinbase, according to Arkham Intelligence. The first transfer was seen as a test to ensure proper connection to the prime account at Coinbase.

From there, the US government followed through with a 2,000 bitcoin transfer worth about $131 million to the same Coinbase wallet. Earlier this year, the US government indicated plans to sell about $13 million worth of bitcoin following approval from the US District Court of Maryland.

Source: https://www.businessinsider.in/cryptocurrency/news/the-feds-are-transferring-bitcoin-to-coinbase-from-a-2-billion-crypto-wallet-seized-from-silk-road/articleshow/109043283.cms

Looks like they're preparing for a massive dump and not just that, based on that article the feds are holding more Bitcoin as well from the recovered wallets from hackers and they're about 94,600 Bitcoins.

Reportedly, US government owns approximately 94,600 Bitcoins. So I see the recent transfer of 2,000 Bitcoins as a test transfer before they actually try to sell the majority of their holding. The current value of these 2000 bitcoins is approximately 140 million. While it's a huge amount of money, I don't see a great impact in the market and on the price. The current market cap of bitcoin is 1.39 trillion. So it's just 0.01% of the Bitcoin's market cap. The market can gulp this 140 million bitcoins and no one would know. I don't foresee any sustained price dump to be honest. But I will be happy if I am proven wrong so that I can score some more bitcoins at a lower price.   

[Synchronice]

I was looking if someone has posted this news already but I'd share it here. The title speaks for itself but I'll just highlight the bullets from the article.

• The US government transferred some of its bitcoin stash to Coinbase this week.
• The government owns about $2 billion worth of bitcoin in a wallet seized from the dark web's Silk Road.
• About 2,000 bitcoin were transferred to Coinbase, worth about $130 million.

On Tuesday, the US government transferred $65 worth of bitcoin to a wallet address held at Coinbase, according to Arkham Intelligence. The first transfer was seen as a test to ensure proper connection to the prime account at Coinbase.

From there, the US government followed through with a 2,000 bitcoin transfer worth about $131 million to the same Coinbase wallet. Earlier this year, the US government indicated plans to sell about $13 million worth of bitcoin following approval from the US District Court of Maryland.

Source: https://www.businessinsider.in/cryptocurrency/news/the-feds-are-transferring-bitcoin-to-coinbase-from-a-2-billion-crypto-wallet-seized-from-silk-road/articleshow/109043283.cms

Looks like they're preparing for a massive dump and not just that, based on that article the feds are holding more Bitcoin as well from the recovered wallets from hackers and they're about 94,600 Bitcoins.

This is the HODLing. Fed is a good Hodler. By the way, I have a good question, did Coinbase asked FED to upload KYC documents and prove the source of their funds? I think that Coinbase should seize those coins because those are coins collected on darknet, so, they should really seize it but since it's Fed and the government is involved, every kind of illegal money is okay for them to exchange and sell on people.
If anything, those coins should be burnt, not exchanged!

[tabas]

They will sell it today or tomorrow. Unless they sell it at once, the market shouldn't react much. Because Bitcoin already pumped a lot and due to their sale, it won't be a be a massive dump. But if they decide to sell everything at once, then we may see a massive dump. Its just not for sale, but it will create a FUD, and investors will panic. I hope institutional investors will back massive sales. They are constantly accumulating Bitcoin, even at its high price. So buy-in demand is pretty high right now. Unless traders panic, Feds won't dump the bitcoin for selling it. 

I think there is a reason why they can't sell it on one big blow and that's why they're doing it in batches. But whether they continue these sell batches, the institutions are always prepared to catch them all.

If they gonna dump this huge amount of bitcoins, then surely the price will drastically drop and that will create a huge chance for anyone who is waiting for the price to get lower and wants to invest to join the potential bull run after bitcoin halving this year.

As many have said in the first page, the amount might affect a bit but it's not that big to affect entirely.

Did they get those bitcoins after they caught the criminals or did they somehow find a way to recover it from them without any interactions? If this is how good they are, then the hackers are no longer a threat to most of us and we can now easily ensure that we can keep our bitcoins more securely than ever before.

Not sure with that but with interrogations and confiscation, it's likely that they've taken it after the criminals have been caught. But if it's about hackers, they are multiplying as well and the breeding of them never stops.

Bitcoin is classified as a commodity and not a security, it must be allocated just as goods are disposed of by displaying them in an open auction and giving the opportunity to anyone who wants to buy according to the auction price. why did the government decide to sell them directly by creating an account in Coinbase, and why now, and why not all seized?

I think there is a condition that they're following as protocol, well this is just my wild guess that they can't sell it all at once because if they can then surely they've done it already. But I agree that they've done auctions before so why not do the same as with this batch.

The US government is always doing this kind of speculation and trying to regulate the market. The government usually sells gradually and I don't think it affects the market much. I don't think it's in the government's interest that the market is in a downturn, but they are always ready to sell bitcoin at any time and under any circumstances. Usually, when the market is in a negative mood, this news comes out and they try to deepen the decline in Bitcoin. But they are wrong, and Bitcoin is always capable of defeating speculation. Bitcoin is also a finite asset and although it is subject to negative speculation, time always works in Bitcoin's favor.

Yeah, as said by someone here. They've sold before and that's not even in the bull run, so, they'll just do what they have to do if it should be dumped at any rate and time that they can. But as also mentioned and questioned by many here, why they can't sell it in one major sell so, there's something that stops them. And if there's a certain purpose to move markets with such news, we're in a bull run and any negative news is going to affect it but it's not that hurting that much anymore.

Considering how much and how fast the price is rising, even hundreds of millions of dollars won't make a significant difference. Still, I think it's better to auction seized funds from illegal operations instead of dumping them on exchanges. Auctions can start around market price but actually push the price up, with some people having a desire to have those specific coins. I know it goes against fungibility of Bitcoin, but it could be better both for the price and for the US government: the price wouldn't be affected, and the US government would get more funds.

Well, whichever is the method of them for disposing these seized Bitcoins or even with other stuff like paintings, the US government is always on a win with this. They actually don't have to find buyers as there will always be interested people and party willing to purchase all of those and the same goes with the auction.

Reportedly, US government owns approximately 94,600 Bitcoins. So I see the recent transfer of 2,000 Bitcoins as a test transfer before they actually try to sell the majority of their holding. The current value of these 2000 bitcoins is approximately 140 million. While it's a huge amount of money, I don't see a great impact in the market and on the price. The current market cap of bitcoin is 1.39 trillion. So it's just 0.01% of the Bitcoin's market cap. The market can gulp this 140 million bitcoins and no one would know. I don't foresee any sustained price dump to be honest. But I will be happy if I am proven wrong so that I can score some more bitcoins at a lower price.   

You're right and just as what the others have said not impacting the market a lot but with people's fear and sentiment, this kind of sell off do affect much with the help of the media.

This is the HODLing. Fed is a good Hodler. By the way, I have a good question, did Coinbase asked FED to upload KYC documents and prove the source of their funds? I think that Coinbase should seize those coins because those are coins collected on darknet, so, they should really seize it but since it's Fed and the government is involved, every kind of illegal money is okay for them to exchange and sell on people.
If anything, those coins should be burnt, not exchanged!

Good question but Coinbase can't do that if you're the government. There's a blessing from the federal government and anything they wanna do will surely have a permission so, possible that the name goes with the KYC as "FED" and Coinbase can't question that whether those coins are tainted because they're seized. They're a registered business and trademark so they're just under the powers of the government and will obey what they wanna do with them.

[ZAINmalik75]

I was looking if someone has posted this news already but I'd share it here. The title speaks for itself but I'll just highlight the bullets from the article.

• The US government transferred some of its bitcoin stash to Coinbase this week.
• The government owns about $2 billion worth of bitcoin in a wallet seized from the dark web's Silk Road.
• About 2,000 bitcoin were transferred to Coinbase, worth about $130 million.

On Tuesday, the US government transferred $65 worth of bitcoin to a wallet address held at Coinbase, according to Arkham Intelligence. The first transfer was seen as a test to ensure proper connection to the prime account at Coinbase.

From there, the US government followed through with a 2,000 bitcoin transfer worth about $131 million to the same Coinbase wallet. Earlier this year, the US government indicated plans to sell about $13 million worth of bitcoin following approval from the US District Court of Maryland.

Source: https://www.businessinsider.in/cryptocurrency/news/the-feds-are-transferring-bitcoin-to-coinbase-from-a-2-billion-crypto-wallet-seized-from-silk-road/articleshow/109043283.cms

Looks like they're preparing for a massive dump and not just that, based on that article the feds are holding more Bitcoin as well from the recovered wallets from hackers and they're about 94,600 Bitcoins.

Yeah there is nothing to worry about that. As far as I know, they have announced it in the past that they are going to sell the seized Bitcoins in portions within a certain period, and it's probably one of the portions they are going to sell as they did in the past, and we haven't seen much of an effect on the price in the past as well.

They are also not going to dump all the coins they hold at once because they aren't doing this for money last time when they sold a portion of the coins, the price of Bitcoin was pretty low, and if they were doing it only for the money and profits, they could wait for the price to go up and then could sell the coins.

Neither this, nor any of their selling in the future will affect the price or the market in any way, besides, there are more Bitcoins bought and sold than that amount of a daily basis, so I don't think this will have any significance in front of that.

You said it right that there is nothing to worry about it because it is just a small amount as compared to the daily time period nevertheless If we monitor the market and see the chart deeply, we can clearly see from the chart that since the US government announced to sell Bitcoin on April 4, the price of Bitcoin has risen instead of being dumped. And if we look further within the day time frame, the price has gained 12.2℅ like from 64,568 to 72,500 in 5 days. So you are right that there is nothing problematic about it, it is a small one, there are bigger transactions in the market and that too brings only 1-2% corruption.

In addition soon we will have Bitcoin halving which will definitely boom market so I think such small amount of selling in such huge market will be just like drop in a ocean.

[Vincom]

This is the HODLing. Fed is a good Hodler. By the way, I have a good question, did Coinbase asked FED to upload KYC documents and prove the source of their funds? I think that Coinbase should seize those coins because those are coins collected on darknet, so, they should really seize it but since it's Fed and the government is involved, every kind of illegal money is okay for them to exchange and sell on people.
If anything, those coins should be burnt, not exchanged!

The FED does not hold BTC, but the US government does. They are not selling all of their BTC at once, but rather in smaller amounts to maximize the revenue for the federal budget.

Coinbase is only freezing "dirty" BTC in accordance with legal requirements. When the US government wants to sell BTC, these BTC will be considered legal and their history may be "washed clean" to make buyers feel more secure when storing and moving them in the future.

I do not hope that these BTC will be burned, they are beneficial to the US government and will make the US government want to support the development of the crypto market.