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U.S. Government Moves $240 Million in Seized Bitcoin to Coinbase

TLDR

  • The U.S. government transferred 3,940 Bitcoin (worth about $240-243 million) to a Coinbase Prime wallet on June 26, 2024.
  • The Bitcoin was seized from convicted drug trafficker Banmeet Singh during his trial in January 2024.
  • This transfer adds to recent selling pressure on Bitcoin, including sales by the German government and Mt. Gox trustees.
  • The U.S. government still holds approximately 213,546 Bitcoin, valued at around $13 billion.
  • The transfer coincided with a slight drop in Bitcoin’s price, falling below $61,000.

On June 26, 2024, the United States government moved a significant amount of Bitcoin to a major cryptocurrency exchange. Data from blockchain analysis firms shows that 3,940 Bitcoin, valued at approximately $240 million, was transferred to a Coinbase Prime wallet.

This Bitcoin came from funds seized by U.S. authorities from Banmeet Singh, a convicted drug trafficker. Singh was arrested in London in 2019 on drug distribution charges and later extradited to the United States in 2023.

In January 2024, as part of his trial, Singh was forced to give up over 8,100 Bitcoin to U.S. authorities. At the time, this was worth about $150 million and was described by the U.S. Drug Enforcement Agency (DEA) as their largest-ever cryptocurrency seizure.

The transfer to Coinbase, a well-known cryptocurrency exchange, suggests that the government may be preparing to sell these assets. This move comes at a time when there are already concerns about selling pressure in the Bitcoin market.

Recently, the German government has been selling some of its Bitcoin holdings, which are worth about $2.76 billion in total.

They sent another batch of Bitcoin to exchanges on June 26, just hours before the U.S. government’s transfer.

Trustees of Mt. Gox, a defunct Bitcoin exchange, are also in the process of selling 140,000 Bitcoin to pay back users who lost funds when the exchange collapsed in 2014.

These large-scale sales by governments and other major holders have raised fears among investors about potential price declines. Indeed, following the U.S. government’s transfer, Bitcoin’s price dropped slightly, falling below $61,000.

However, it’s worth noting that the impact of these sales might be lessened by other market factors. For instance, the amount of Bitcoin held on exchanges is at a six-year low, which could help stabilize prices.

The U.S. government remains one of the largest holders of Bitcoin. Even after this transfer, blockchain data shows that it still owns about 213,546 Bitcoin, worth around $13 billion. These holdings come from various seizures and legal forfeitures over the years.

The case of Banmeet Singh, the source of this particular Bitcoin transfer, highlights the increasing role of cryptocurrency in both criminal activities and law enforcement actions.

According to the U.S. Department of Justice, Singh ran a drug trafficking network from 2012 to 2017, with operations in several U.S. states. He was sentenced to five years in prison in April 2024 but was given credit for time served and has reportedly been released.

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