Bitcoin (BTC) Price Drops 2% After U.S. Government Moves 3,940 BTC Seized from Silk Road Vendor

Bitcoin(BTC)cameundersellingpressureastheU.S.governmenttransferred$240millionworthofcryptotoaCoinbasePrimeAddress.

Bitcoinpricedroppedover2%onApril5afterU.S.governmentmovednearly4,000BitcoinfromawalletlinkedtoauthoritiestoaCoinbasePrimeaddress.The3,940BTC,currentlyvaluedatover$240million,wereforfeitedfromSilkRoadvendorBanmeetSinghinaJanuarytrial,accordingtoArkhamIntelligence.TheforfeitedcryptowastransferredtoaknownU.S.governmentaddressbeforebeingmovedtoCoinbase.Bitcoinpricefelltoalowof$61,000ontheBitstampexchangefollowingthegovernmenttransaction.Thetopcryptocurrencyrecoveredslightlyandwastradingaround$61,500atthetimeofwriting,downabout2.2%overthepast24hours.Thegovernmentwallet,knownas"1P5ZED",hasbeenlinkedtoseverallargecryptomovementsinthepast.InMarch,atotalof18,000BTCwasmovedoutofthewalletovertwotransactions.ThecryptowaslatersoldonCoinbasePrime.Intotal,U.S.authoritieshaveconfiscatedaround50,000BTCfromSilkRoad.ThegovernmenthasalsoseizedSilkRoadBTConseveraloccasions.ThegovernmenttapsanexchangetosellconfiscatedBitcoinEarlierinMarch,theU.S.governmentsoldnearly10,000BTConCoinbasePrime.Thetotalamountsoldwasvaluedatover$216millionatthetime.CoinbasePrimeistheinstitutionalplatformofcryptoexchangeCoinbase.Theplatformoffersservicessuchascustody,tradingandprimebrokerageforlargeclients.InstitutionsandgovernmentshaveincreasinglyusedCoinbasePrimetoselllargeamountsofcrypto.In2022,cryptoexchangeFTXsoldnearly50,000BTConCoinbasePrimeoverseveraltransactions.GovernmenttapssuedexchangeforBitcoinsell-offCoinbasehasbeensuedbyseveralgovernmenttapsoverthesaleofBTC.InMarch2023,agroupofsevenstatetreasurersfiledalawsuitagainstCoinbaseovertheexchange'sallegedroleinfacilitatingthegovernment'ssaleofconfiscatedBitcoin.Thetreasurers,ledbyPennsylvaniaTreasurerStacyGarrity,allegethatCoinbaseviolatedstatelawsbysellingtheBTCwithoutobtainingthenecessarylicensesorregistrations.Thetreasurersalsoclaimthatthegovernment'ssalesofBTCdrovedownthepriceofthecryptocurrency,causinglossesforstatepensionfundsandotherinstitutionalinvestors.ThetreastiesareseekingtorecoverdamagesandaninjunctiontopreventCoinbasefromfurthersellinggovernment-confiscatedBTCwithoutobtainingtheproperlicensesorregistrations.Coinbasehasnotyetcommentedonthelawsuit.

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