A wallet associated with seized Silk Road funds moved $1.08 billion in BTC. The address moved 39,174 BTC to two new wallets, and 9,825 BTC to a wallet reportedly belonging to Coinbase. The funds were originally seized from Silk Road exploiter James Zhong in November 2021.
The address, which begins with BC1QMX, transferred about 9,000 BTC ($199 million) to an address beginning in BC1QE, then 30,174 BTC ($667 million) to a second address beginning in BC1QF, and 9,825 BTC ($217 million) to a third address starting in 367YO. A little over 825 bitcoins ($18 million) remain in the original address.

According to on-chain security firm PeckShield, the original address belongs to the U.S. government, which uses the wallet to store some of the 50,676 BTC ($1.12 billion) it seized from Silk Road exploiter James Zhong in November 2021. Zhong obtained the sum by exploiting the darknet marketplace’s withdrawal mechanism in September 2012. He pleaded guilty to one count of wire fraud in November 2022.
The first two addresses, which received a combined total of 39,174 BTC, were freshly created. However, PeckShield identified the third address (367YO) as belonging to U.S.-based crypto exchange Coinbase. Bitcoin on-chain analytics firm Glassnode and on-chain analytics firm Lookonchain both echoed PeckShield’s findings. Crypto Briefing was unable to independently verify wallet ownership.
Silk Road was the first crypto-powered dark market, hosting eBay-styled listings for all manner of contraband, including narcotics and firearms. Ross Ulbricht launched the platform in 2011, and it shut down in 2013 after Ulbricht’s arrest. Authorities seized 173,991 BTC at the time, including 144,336 owned by Ulbricht. The government sold those coins in four auctions in 2014 and 2015.

In November 2020, the U.S. Department of Justice filed a civil forfeiture action against a U.S.-based person it claimed was in possession of more than 50,000 BTC they had stolen from Silk Road. In November 2022, the U.S. Department of Justice said a Georgia man named James Zhong had pleaded guilty to wire fraud. He was sentenced to nine years in prison and forfeited the stash of BTC to the government as part of a plea deal.
An open market sale would be a departure from authorities’ past handlings of seized digital assets. The government usually sells seized assets at auction. In 2014 and 2015, the government auctioned off bitcoin seized from the owner of virtual black market platform Silk Road.
Although concerns about the tokens’ sale on the open market may be overblown, fears that bitcoin prices could take a hit are not entirely unjustified, says Conor Ryder, a researcher at crypto markets analysis firm Kaiko.