Will the US Govt Cause Bitcoin Price Volatility Post ‘Binance Move’?

Paigambar Mohan Raj
Source: Financial Times

According to crypto security-focused firm PeckShieldAlert, the US Government has moved 9.8K Bitcoin (BTC) worth $324 million into multiple wallets. According to the firm, the coins were moved from wallets connected to government law enforcement seizures.

Out of the total amount moved, 7.76k BTC was distributed among 98 addresses, with each receiving 79.2 BTC. However, PeckShield noted that two addresses have transferred their holdings, worth $4.86 million in total, to Binance.

Although it is unclear if the Bitcoins (BTC) are from one seizure or many, it should be noted that PeckShieldAlert has used “Silk Road” as a hashtag. Silk Road was a darknet marketplace for illicit goods and activities, which is now defunct. In November 2022, the US Department of Justice seized $3.36 billion worth of BTC connected to the Silk Road. Therefore, it is possible that the current movement of coins is related to the ones which were seized last year.

Also Read: How much Bitcoin does the U.S. Government Hold?

At the moment, the reason behind the movement is unknown. It is possible that the government is organizing its seized digital assets into various wallets based on different cases.

However, it is important to note that two of the addresses have moved their holdings to Binance. This opens up the possibility that they may be sold and re-enter the market. If the assets are sold, it could lead to a volatile price swing for BTC. Moreover, this could also mean that the remaining BTC, which is now in hard wallets, could also re-enter the market.

Community reacts to US govt. moving Bitcoin into Binance

Source: Bitcoinist

Although the picture is not clear as to why government-seized Bitcoins are moving into different wallets, many have pointed out that the flow of BTC into Binance is surprising, given that another government agency, the SEC, is suing the exchange.

The move is ironic given that the Justice Department and the US SEC are under the same Constitution. While one is suing Binance for the alleged sale of unregistered securities, another is using it for potentially selling or storing assets.

Nonetheless, the US government has not yet made any announcements about its Bitcoin (BTC) transfer. If they are indeed trying to sell the BTC, it would not be the first time they have carried out similar activity. In March 2023, the government sold $215 million worth of Bitcoin (BTC) connected to the Silk Road seizure. Moreover, they expressed plans to sell a total of $1.18 billion worth of BTC over time.

Also Read: US Government to Sell 41,500 Bitcoin ($1.18 Billion) Connected to Silk Road