$2 Billion in Silk Road Bitcoin Moved to Coinbase Wallet

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  • A Bitcoin wallet reportedly belonging to the US government moved 30,175 to a Coinbase address yesterday, indicating potential upcoming sales
  • The transfer, valued at about $2 billion, likely originates from bitcoins seized from hacker James Zhong
  • It would mark the second sale related to Zhong, with first coming this time last year

A Bitcoin wallet linked to the US government transferred 30,175 to an address reportedly associated with Coinbase yesterday, prompting suggestions that it will soon begin to sell the haul. This transfer, valued at approximately $2 billion at the time, appears to be part of the stash seized by police from the residence of James Zhong, a hacker who stole more than 50,000 from the marketplace in 2012. This sale would represent the second connected to Zhong following the sale of 9,861 coins for almost $216 million in March 2023.

Stash Likely Linked to 2012 Hack

Zhong defrauded Silk Road 12 years ago when he created a series of accounts and triggered over 140 rapid transactions to trick Silk Road’s payment system into releasing approximately 50,000 into his accounts. He subsequently transferred the bitcoin into various addresses under his control, where they lay untouched for almost a decade.

The hacker was undone, however, when he sold the 50,000 Bitcoin Cash tokens that came his way as a result of the 2017 hard fork, with the Inland Revenue Service tracing the sale to him and his Gainesville, Georgia residence. In November 2021, law enforcement officials executed a premises search warrant where they discovered approximately 50,491 bitcoins at Zhong’s residence, among other assets.

While it is not confirmed that the sale is related to the Zhong case, there have been no other seizures of that magnitude since this one. 

The destination of the recently transferred bitcoins remains undisclosed, but cryptocurrency sleuth ZachXBT identified the receiving wallet as belonging to Coinbase:

It seems, therefore, that we can expect a sale or more likely an auction in the very near future, so time to get your wallet out if you’ve got a couple of billion lying about.