Home Blockchain Feds consolidate 40k BTC, prompting fears of imminent sell-off

Feds consolidate 40k BTC, prompting fears of imminent sell-off

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Around 40,000 bitcoins held in wallets related to law enforcement seizures in the US appear to be currently being transferred. New data with Glassnodea blockchain analytics company.

Currently, most of these transactions appear to be internal transfers.

Of the seized Bitcoins, on-chain data shows that 9,861 were seized from Silk Road hackers and sent to Coinbase Cluster.

Another on-chain security company, PeckShield, Tweet Around 40,000 BTC was revealed to have been consolidated into two wallets controlled by the US government.

Glassnode Data US Government Bitcoin Balance Feb 2023
(Source: Glassnode)

US government cryptocurrency is on the move

The move of $1 billion worth of bitcoin between U.S. government wallets, including a transfer of $217 million to Coinbase, has raised concerns about a potential sale that could push the price of bitcoin lower. It’s causing concern within the community.

The seized tokens come from a 2013 raid on Silk Road, a marketplace for illegal goods and services. By the end of that year, the FBI had become his 10th largest Bitcoin holder in the world, and in various seizures he had amassed over 144,000 tokens.

Silk Road is an online marketplace founded by Ross Ulbrict to facilitate the sale and transfer of illicit goods through a combination of VPNs and cryptocurrencies.

The Federal Reserve also sells seized illegal crypto assets. 2021, Department of Justice announced They sold $56 million worth of seized cryptocurrency in return to victims of the BitConnect fraud scheme.

Impact of a Potential Selloff on the BTC Market in the Short Term

Concerns are growing that the potential sale of 40,000 Bitcoin could put downward pressure on the price of the cryptocurrency. Moreover, it remains to be seen what kind of support there will be at levels below $21,000 as Bitcoin dropped more than 9% last week.

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