A U.S. government-controlled account, known for holding nearly $2 billion in Bitcoin confiscated from the defunct dark web marketplace Silk Road, executed several transactions on Tuesday, hinting at a potential upcoming sale of these digital assets, multiple blockchain analytics firms reported.
The account performed a minor transaction of approximately $65 to a deposit address at Coinbase (NASDAQ:COIN) Global Inc.'s Coinbase Prime unit, as noted by Arkham Intelligence Inc.
In total, transfers amounting to roughly $131 million to Coinbase were recorded on Tuesday, with a significant portion being redirected to other addresses linked to the U.S. government, according to the firm's analysis.
"This appears to be a test transaction from the U.S. government,” analysts noted, regarding the $65 transaction.
“The small amount is being sent to Coinbase Prime, while the large amount is being credited back to the U.S. government as a ‘change output.’ Most likely, they will follow up by sending a larger (possibly the full) amount to Coinbase Prime, having confirmed the test transaction arrived at its intended destination.”
Afterward, further transactions saw around 2,000 Bitcoin being consolidated from several government addresses and moved to Coinbase, according to Flipside Crypto.
While digital wallets typically maintain anonymity, these transactions are closely monitored by market participants due to their potential to influence Bitcoin's market price.
The U.S. government has previously liquidated portions of its Silk Road Bitcoin holdings, such as through auctions. The account involved in Tuesday's transactions originally contained 30,174 Bitcoin.
The Silk Road platform, which was shut down by the government in 2013, enabled users to purchase illicit goods ranging from narcotics to counterfeit documents using BTC.
At the time of its closure, federal agents confiscated Bitcoin valued at $3.6 million, which has since surged to billions of dollars as a result of the cryptocurrency’s rally.