Glassnode has detected the movement of approximately 40,000 Bitcoins tied from wallets linked to seizures conducted by US law enforcement.
The transfers have raised concerns of a sell-off, especially since such activity could indicate a potential sale that could put significant pressure on Bitcoin’s price.
Bitcoin is currently under major selling pressure after falling below a critical support point at $22,018.
Movement of seized Bitcoins
The transfers were marked by Glassnode. According to the crypto analytics firm’s update, a majority appears to be internal transfers. However, nearly 9,861 BTC (worth $217 million) seized by the Silk Road hacker have been sent to crypto exchange Coinbase.
This was later confirmed by the blockchain security firm PeckShield, which revealed that Silk Road’s proceeds were consolidated into two wallet addresses. Notably, the BTC in question was seized by the US government between November 2021 and March 2022.
During this time, more than 51,000 BTC were seized from a person who obtained the money “illegitimately” after hacking into the now-defunct online black market.
Silk Road allowed the purchase and sale of narcotics and other illegal items without government intervention. The market closed in 2013 and the activity of seized funds seems to pop up occasionally.
Within a few months, the FBI seized about 144,000 Bitcoins, making the US government one of the 10th largest bitcoin holders that year. In 2015, two US Secret Service agents – Shaun Bridges and Carl Mark Force – were caught stealing 1,600 Bitcoins seized by federal authorities and sentenced to prison.
Handling seized funds
Bitcoins are usually sold at public auctions held by the US Marshals Service – which happens to be a law enforcement agency within the Department of Justice (DOJ).
Over the past few years, the government’s repossession and sale operation has grown rapidly. To help manage the storage and oversee the sale of its hoard of tokens, the enforcement agency even tapped custodian Anchorage Digital in 2021.
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