Department of Justice Moves Seized $2 Billion Silk Road Bitcoin to Different Wallet

Last Updated on April 3, 2024

Written by

Efe Bravo

A silk road coin placed on top of lights

Key Takeaways:

The U.S. government transferred approximately $2 billion in Bitcoin, seized from James Zhong due to his Silk Road involvement, to a new, undisclosed address, marking a significant move within the cryptocurrency community.
Blockchain data revealed the transfer included an initial small transaction to a Coinbase Prime address for verification, followed by the main transfer of 30,174 BTC.
The recent transfer is part of the U.S. government’s management of seized assets, with a previous sale of about 9,861 BTC for over $215 million in March 2023, amidst a backdrop of Bitcoin’s value dropping over 7%.

The recent transfer of approximately $2 billion in Bitcoin, previously confiscated by the U.S. government from James Zhong due to his involvement with the infamous Silk Road marketplace, has generated significant buzz in the cryptocurrency community.

This notable transaction involved moving the funds to a new, undisclosed address.

According to Arkham, address tagged U.S. Government: Silk Road DOJ Confiscated Funds (bc1qky…2au478) transferred 2,000 BTC to Coinbase Prime today, worth $131 million. Another address currently holds 29.8k BTC, worth $1.94 billion. https://t.co/dXoezUI8kd https://t.co/Il2MCIq6jP
— Wu Blockchain (@WuBlockchain) April 3, 2024

On April 2, blockchain data revealed an initial small transaction of 0.001 BTC to a Coinbase Prime address from a wallet associated with the U.S. Department of Justice (DOJ), presumably to verify the transaction path.

This was quickly followed by a significant transfer of 30,174 BTC, equivalent to about $2 billion.

UNITED STATES GOVERNMENT MOVES SEIZED SILK ROAD BITCOIN AND SENDS CRYPTO TWITTER INTO A WILDLY UNNECESSARY PANIC

Approximately $2 billion worth of Bitcoin, previously seized by the U.S. Department of Justice (DOJ) in connection with the Silk Road marketplace, has been… pic.twitter.com/Y1A0gFKJBQ
— The Wolf Of All Streets (@scottmelker) April 2, 2024

The community of online investigators traced this wallet back to the DOJ, identifying it as the repository for Bitcoin seized from Zhong, who was found guilty in 2022 of acquiring cryptocurrency through fraudulent means linked to Silk Road.

Zhong’s scheme in 2012 led to the theft of over 50,000 BTC from Silk Road.

Wallet labelled as 'Silk Road DOJ confiscated funds' containing $2 billion of Bitcoin instigates possible test transaction for 0.001 BTC to Coinbase prime wallet, per the Block.
— unusual_whales (@unusual_whales) April 2, 2024

A dramatic turn of events in 2021 saw U.S. officials raiding Zhong’s residence, where they uncovered hardware wallets filled with Bitcoin, one of which was ingeniously hidden within a popcorn tin beneath blankets.

The majority of the confiscated cryptocurrency, totaling more than 30,000 BTC, was sent on April 2 to the same newly identified address.

In related news, the U.S. government had previously reported the sale of about 9,861 BTC from Zhong’s seized assets for over $215 million in March 2023.

*WALLET LABELLED AS 'SILK ROAD DOJ CONFISCATED FUNDS' CONTAINING $2 BILLION OF BITCOIN INSTIGATES POSSIBLE TEST TRANSACTION FOR 0.001 BTC TO COINBASE PRIME WALLET: ARKHAM DATA AND LABELLING – THE BLOCK PRO
— The Block Pro Headlines (@theblockupdates) April 2, 2024

This left an estimated 40,000 BTC still under government control.

The transaction coincided with a drop in Bitcoin’s value by over 7%, bringing its price down to $65,475.

Silk Road, a marketplace notorious for facilitating the sale of illegal goods such as drugs, weapons, and stolen financial data, has been shut down for over a decade.

JUST IN: The Silk Road DOJ Confiscated Funds wallet has just moved 30174 #BTC worth $2 Billion to Coinbase pic.twitter.com/KR1hJXjjwK
— LuxAlgo (@LuxAlgo) April 2, 2024

Its founder, Ross Ulbricht, was arrested in 2013 and is currently serving two life sentences without the possibility of parole, marking a significant chapter in the ongoing saga between law enforcement and digital marketplaces.