Glassnode has detected the movement of approximately 40,000 Bitcoins tied from wallets tied to seizures conducted by US law enforcement.
The transfers have sparked concerns about a sell-off primarily because such an activity could point towards a potential sale that could put significant pressure on Bitcoin’s price.
Bitcoin is currently facing significant sell pressure after dropping below a critical area of support to $22,018.
Movement of Seized Bitcoins
The transfers were flagged by Glassnode. According to the crypto-analytic firm’s update, a majority appear to be internal transfers. However, nearly 9,861 BTC (worth $217 million) seized from the Silk Road hacker have been sent to the crypto exchange Coinbase.
This was later confirmed by the blockchain security firm, PeckShield, which revealed that the proceeds from Silk Road were consolidated in two wallet addresses. Notably, the BTC in question was seized by the US government between November 2021 and March 2022.
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More than 51,000 BTC were seized during this time from an individual who had “unlawfully” obtained the funds after hacking the now-defunct online black market.
Silk Road allowed the purchase and sell narcotics and other illicit items without governmental interference. The marketplace shut down in 2013 the activity of the seized funds appears to crop up now and then.
Within a few months, the FBI seized around 144K Bitcoins, which led the US government to become 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 confiscated by federal authorities and were sentenced to prison.
Handling Seized Funds
Bitcoins are usually sold in public auctions conducted by the US Marshals Service – which happens to be a law enforcement agency within the Department of Justice (DOJ).
Over the past couple of years, the go government’spto seizure and sale operation has grown rapidly. To help with managing the storage and monitoring the sale of its hoard of tokens, the enforcement agency even tapped custodian Anchorage Digital in 2021.
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