Silk Road Bitcoin Are ‘Almost Certainly’ Sold By US Gov, Claims Lawyer
17 August 2024 - 12:30AM
NEWSBTC
Another transfer by the US government of originally seized Bitcoin
from the notorious Silk Road has sparked widespread speculation on
Wednesday, August 14. Blockchain analytics firm Arkham reported
yesterday that 10,000 Silk Road BTC, valued at approximately $593.5
million, were transferred to Coinbase Prime, a platform used
primarily for institutional investors. According to Arkham’s post
on X: 10,000 Silk Road BTC ($593.5M) moved to Coinbase Prime.
Wallet bc1ql received 10K BTC from a known US Government wallet 2
weeks ago. This BTC has just been sent on to 33J, a Coinbase Prime
deposit wallet.” Is The US Gov Selling Bitcoin? This transaction
comes on the heels of a June announcement from the US Marshals
Service (USMS), part of the Department of Justice, detailing a new
partnership with Coinbase Prime to provide custody and advanced
trading services for the agency’s “Class 1” (large cap) digital
assets. The community is torn over whether these moves signify the
selling of the Bitcoin or merely a transfer for custody purposes.
Thus, many speculated that the US gov is not selling. Related
Reading: Sovereign Wealth Funds Could Take Bitcoin To $148,000:
Researcher However, Scott Johnsson, a finance lawyer and general
partner at Van Buren Capital, expressed a distinct view today,
arguing that the transaction signals a definitive sale of the
seized assets by the US government. Johnsson remarked: “Yes, US
Marshal Service (USMS) is almost certainly selling silk road
Bitcoin […] USMS has been sending BTC to a custodial address
required by the terms of the servicing agreement […] Given the
agreement requires USMS assets remain completely segregated,
whenever a transfer is ultimately made to CB prime (or other
commingled exchange address), you can be sure USMS has already sold
or is selling imminently.” Johnsson further supported his claim by
referencing the DOJ’s Office of Inspector General (OIG) report and
the crypto services agreement RFP, which stipulate the rapid
liquidation of assets within five business days of forfeiture and
the necessity of segregated wallet addresses to prevent co-mingling
with other assets. It states: “The USMS intends to resolve this
issue using its planned cryptocurrency services contract, which
will require the contractor to liquidate cryptocurrency within 5
business days of the asset being forfeited.” Related Reading:
Analyst Warns: Bitcoin Nears Dangerous Territory – $40,000 On The
Horizon? Johnsson anticipates that formal confirmation of these
sales might not emerge until the publication of the DOJ’s Asset
Forfeiture Program FY2024 report in January. However, the unfolding
events could provide earlier indications as more details become
available through official channels or subsequent asset movements.
“Official confirmation will definitively come (at the latest) upon
the DOJ’s Asset Forfeiture Program FY2024 report in January, if not
earlier. I also don’t think it’s a coincidence this began in
earnest following the Trump speech.” Users on X expressed their
confusion regarding Johnsson’s analysis. Rodeo queried: “These
coins were supposed to be sold by the end of last year[…] You’re
saying the act of transferring these coins to Coinbase from their
current address is enough to imply selling because the Coinbase
addresses are not completely segregated addresses?” Responding to
these concerns, Johnsson clarified: “Not necessarily Coinbase alone
(there’s an interim segregated custody step), but once they hit
commingled addresses it’s reasonable to infer they’re sold. And
yea, there was a backlog of forfeited BTC that was supposed to be
sold already. Finalizing the services agreement appears to have
been (at least part of) the hold up.” Notably, the latest BTC
transaction by the US government comes just a few weeks after
Republican presidential candidate Donald Trump proposed to
establish a “strategic national Bitcoin stockpile” at the Bitcoin
2024 conference. After that, rumors emerged that Democrats under
the lead of Kamala Harris could empty the BTC holdings by the US
government from confiscations. While Harris pleads to take a more
pro-crypto stance, several experts refuse this claim, based on the
latest actions by her. At press time, BTC traded at $59,336.
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