Despite all the euphoria about the BlackRock Bitcoin spot ETF, there are still a few events hovering over the Bitcoin and crypto market like a sword of Damocles that could cause a significant pullback. One of these reasons are the planned Bitcoin sales by the United States government this year.
As Bitcoinist reported, the US government still plans to liquidate more than 41,000 BTC seized in a case related to the legendary darknet platform Silk Road. A court document revealed that the US government has started liquidating around 51,352 BTC earlier this year. On March 14, around 9,861 BTC were liquidated, leaving around 41,491 BTC to be sold.
Uproar Over Alleged Bitcoin Transactions By US Govt
News of a supposed Silk Road-related transfer of BTC came once again from on-chain data provider Arkham Intel. The data provider has already caused chaos in recent months with hoax data.
At the end of April, an Arkham alert caused a Bitcoin crash of 7% when news spread that Mt Gox. and US government wallets were conducting transactions. A few hours ago, Arkham reported via Twitter that the address “bc1qzd8” used an exchange deposit wallet that was otherwise only used by known US government-related James Zhong confiscation addresses.
“bc1qzd8” sent 10,298 BTC to what we believe is an exchange deposit wallet today. The only other addresses to use it sent amounts associated with the USG [US government] forfeiture.
Arkham finds the supposed proof of this in an announcement by the US Department of Justice (DOJ), where various forfeiture cases related to James Zhong are mentioned, and the seized Bitcoin amounts are specified to 8 digits of a decimal.
According to Arkham, at 19:36 yesterday, June 20, the first transaction was made to a new address: 10,298 BTC from “bc1qzd8”. Shortly afterwards, the same exchange address used by “bc1qzd8” received 115.025 BTC. As the tweet states, this is the exact amount mentioned in the DOJ announcement, from an address that received these funds on April 28, 2022 (the exact date referenced in the announcement).
Subsequently, the address received 4,574 BTC, another exact amount mentioned in the announcement, from an address that received these funds on June 8, 2022, which also coincides with the DOJ announcement. “We believe this association is strong enough to attribute “bc1qzd” to an additional USG-related wallet,” Arkham concludes.
TL;DR: Today bc1qzd8 has used an exchange deposit wallet that has only otherwise been used by known USG Zhong confiscation addresses, all within three hours of one another.
bc1qzd8 sent 10.298 BTC to what we believe is an exchange deposit wallet today. The only other addresses… https://t.co/5LWZEUQaUI pic.twitter.com/Czqdw9KYpT
— Arkham (@ArkhamIntel) June 20, 2023
But the chief analysts at on-chain data provider CryptoQuant disagree. Co-founder and CEO Ki Young Ju replied to Twitter user @zoomerfied: “This is not true. Highly likely mislabeled,” and added that the address “bc1qzd8” is not owned by the US government, nor is it in a cluster or near addresses listed in US government records. In addition, Young Ju clarified that the transaction patterns appear to be exchange wallets, not the US government:
‘bc1q95h6…’ appears to be an exchange deposit wallet, while ‘bc1qzd8c…’ seems to be an exchange hot wallet aggregating user deposits.
After the US gov seized coins from a crypto exchange, the dust btc was transferred to hot wallets imo.
Julio Moreno, head of research at CryptoQuant added:
US Government is said to have moved 1,500 seized #Bitcoin in one transaction today. I think that most are missing the point that 1,490 BTC were just sent to a change address, so no selling pressure. This is why bitcoin price did not care. Gov still has 204K BTC to sell.
At press time, the market seemed to believe the CryptoQuant analysts. The Bitcoin price was unimpressed by the rumor and traded at $28,866 (+7.8 % in the last 24 hours).
