Will Seized Silk Road Bitcoin Hit The Market? $1B In BTC Transferred

U.S. law enforcement agencies have seized numerous Bitcoin from the Silk Road over the years and have periodically auctioned a notable portion.

On Mar 8, someone transferred more than 50,000 Bitcoin, valued at $1 billion, from several wallets linked to seizures by U.S. Government law enforcement. The transfer involved sending some Bitcoin to Coinbase while the rest went to new addresses.

PeckShield, an on-chain analytics firm, shared data indicating that three transfers were conducted from wallets belonging to U.S. law enforcement agencies. These wallets contained almost 51,000 BTC seized from the Silk Road marketplace in Nov 2021 by U.S. agencies. We combined and moved the confiscated BTC to two wallet addresses.

Most of the three transfers were internal, but there was a notable transfer of about 9,861 BTC to Coinbase. The remaining two transfers consisted of 30,000 BTC and 9,000 BTC, respectively.

Tim Draper’s Massive Purchase Of Bitcoin From Silk Road Auction

In 2011, Ross Ulbricht, an American founder who operated under the alias “Dread Pirate Roberts,” launched the Silk Road, which became the first modern darknet market and an infamous online black market. This marketplace was noteworthy for its acceptance of Bitcoin payments, contributing to the widespread adoption of cryptocurrency. However, U.S. law enforcement authorities seized several assets from Ulbricht, including significant amounts of Bitcoin, which have been periodically auctioned.

In 2014, Tim Draper, a well-known advocate of Bitcoin, purchased almost 30,000 BTC through one of the auctions. Later in Oct 2015, the U.S. Marshals Service organized another auction, offering 50,000 BTC for sale. The online auction consisted of 21 blocks of 2,000 BTC and one block of 2,341 BTC.

Although only a fraction of the 50,000 BTC was transferred to Coinbase, billions of dollars worth of BTC from wallets linked to U.S. law enforcement agencies prompted strong reactions and various theories from Twitter users. Selling Silk Road Bitcoin by U.S. agencies may create selling pressure and impact the market, speculate some users. Additionally, a few users questioned the timing of the sale.

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