Prominent finance attorney Scott Johnsson stated that the United States Marshals Service (USMS) is orchestrating the selloff of the Bitcoin seized from the Silk Road marketplace. Per Johnsson’s claim, the US Marshals and Coinbase established a service agreement in June.
US Government Bitcoin Transfer
The finance lawyer stated that the agreement, which involves the transfer of Bitcoin to Coinbase Prime, signifies that the USMS has either finished or is nearing the completion of a sale. He goes on to say that the agreement specified that the USMS’s assets must always be kept completely apart from other holdings.
As a result, the assets have either been sold or are about to be liquidated once they are transferred to Coinbase Prime or another similar exchange. Johnsson further noted that it is likely that the Department of Justice’s Asset Forfeiture Program report for the fiscal year 2024, which is expected in January, will include confirmation of these transactions.
Johnsson also raised the possibility that the Biden administration will continue to employ this tactic continuously.
Divergent Perspectives
Despite the speculations surrounding the asset transfer, some disagree with Johnsson’s analysis and interpretation of the event. Chief analyst at Bitget Research Ryan Lee asserts that it is doubtful that the crypto token associated with the Silk Road, which has generated a lot of controversies, will be sold.
Earlier this week, the US government moved around $600 million worth of Bitcoin to Coinbase, according to on-chain analytics company Arkham Intelligence. The asset was transferred to a Coinbase Prime wallet for deposits.
As former President Donald Trump has highlighted, the US government is currently the largest geopolitical Bitcoin holder. The discussion is further complicated by the fact that Trump, the Republican Party’s nominee in the upcoming 2024 presidential election, has promised not to sell any of the government-owned Bitcoins if reelected.
The Department of Justice (DOJ) confiscated 50,000 BTC from the dark web marketplace during a sting operation in 2022. This significant on-chain asset transfer comes after another large-scale event in April when the US government transferred $2 billion worth of Bitcoin seized from the Silk Road theft.
Bitcoin Fog Founder Challenges Prison Sentence
Meanwhile, Roman Sterlingov, the founder of the crypto mixing platform Bitcoin Fog, is challenging the possible 30-year jail term after being found guilty of several money laundering-related offenses. The legal team representing Sterlingov contended in a document filed on August 15 with the United States District Court for the District of Columbia that the sentence was excessive and not in line with previous similar cases.
They stressed that the government’s suggested sentence of 20 to 30 years is not commensurate with the alleged offense. Sterlingov was pronounced guilty in March on accusations of money laundering, conspiracy, running an unauthorized money-sending business, and transmitting money without a license in Washington, DC.
According to the prosecution, Sterlingov used Bitcoin Fog to help launder around $400 million in Bitcoin linked to several crimes, such as internet fraud, identity theft, and drug trafficking, between 2011 and 2021. Sterlingov’s defense team contests his degree of involvement, claiming he was not in charge of the company’s management.
They contend that a large portion of the evidence used in the trial was circumstantial and that important documents—like the ledger, server logs, private keys, and Bitcoin Fog server—were never tendered in court.
Tornado Cash Resurgence
Meanwhile, Tornado Cash, the popular crypto mixer, has recorded significant deposits, topping $1.8 billion in the first half of 2024. This signifies a 45% increase compared to the total quantity deposited in the mixer during 2023.
Money from hackers involved in large-scale thefts has recently poured into Tornado Cash. According to Arkham Intelligence, the hacker who stole over $100 million from the Poloniex exchange last year has moved $76 million to Tornado Cash in the last two months.
In August 2022, the US Treasury imposed sanctions on Tornado Cash for its role in the money laundering of Bitcoin valued at over $455 million by the North Korean hacker Lazarus Group. However, monthly deposits to Tornado Cash fell by more than 90% following these bans. Nonetheless, Tornado Cash’s decentralized structure poses challenges for US authorities in effectively monitoring its use.
