Arkham Intelligence reported that 3,940 BTC sent to Coinbase was originally forfeited from Silk Road vendor and narcotics dealer Banmeet Singh in a January trial. This follows the arrest of Ulbricht by the Federal Bureau of Investigation (FBI) in 2013 and the subsequent shutdown of Silk Road. In 2022, U.S. law enforcement confiscated about 50,000 BTC, and Silk Road BTC has been seized on multiple occasions.
The transaction on Wednesday led to a modest decrease in the total cryptocurrency market, including BTC. Coinbase is the preferred off-ramp vehicle for government liquidations, but regulators have raised concerns about violations and illegal business conduct. Under chair Gary Gensler, the Securities and Exchange Commission (SEC) charged Coinbase with operating an unregistered securities exchange and unlicensed broker-dealer.
In response, Coinbase denied the allegations and launched counterarguments in court, accusing the SEC of denying clear rules and registration processes for crypto businesses.