'Silk Road' Bitcoin Sent to Exchange Proclaimed 'Illegal,' Crypto Advocate Enraged

Cryptocurrency advocate John Deaton (who particularly supports Bitcoin and XRP) has taken to his account on the X social media platform to share his take on the recent quarter-million-USD worth of Bitcoin transaction made by the U.S. government to the Coinbase exchange.

This was part of the funds confiscated in 2013 from the Silk Road dark web market place when it was shut down and its founder Ross Ulbricht arrested and given two lifetime prison sentences.

Deaton stated that this does not coincide with the recent SEC policy of proclaiming Coinbase illegal.

This is the NONSENSE people are sick and tired of coming from our government. @GaryGensler, working at the direction of @ewarren, joined the anti-crypto army she promised to build when she announced her reelection. Gensler, as Chairman of the @SECGov, has declared Coinbases…

— John E Deaton (@JohnEDeaton1) June 27, 2024

Gary Gensler proclaims Coinbase “illegal”

Deaton reminded the community that chairman of the U.S. Securities and Exchange Commission Gary Gensler has “declared war” on Coinbase by labeling its business as illegal for trading altcoins, which he refers to as “unregistered securities,” setting forth its charges against the exchange in June last year.

In response, Coinbase filed a lawsuit against the regulator. However, what has happened now is that the U.S. government has sent 3,940 BTC worth roughly $241.22 million to this exact exchange to be sold. This money was initially confiscated from a drug trafficker on the Silk Road, and then was forfeited at trial in January 2024.

John Deaton called this move “nonsense coming from our government” since it allows Gary Gensler and Senator Warren to stand against the whole cryptocurrency space but continues to use the services of the largest U.S.-based crypto exchange, Coinbase Prime. Prior to that, a similar sale occurred in March last year when the U.S. governments wallet sold 9,861 coins for $216 million.

Bitcoin price pushed down by sale

According to cryptocurrency journalist Colin Wu, after the aforementioned transaction, the U.S. government still owns 213,546 BTC confiscated from Silk Road, worth more than $13 billion.

The US government wallets deposited 3,940 BTC($241.22M) into Coinbase Prime today. The US government currently holds 213,546 BTC($13.07B). The founder of CryptoQuant said it would not have much impact on the market. Coinbase Prime handled 20-49K BTC in sell-side liquidity daily…

— Wu Blockchain (@WuBlockchain) June 26, 2024

The founder of on-chain data aggregator CryptoQuant believes that this sale will hardly impact the price of Bitcoin on the market. However, this sale coincided with a 1.76% Bitcoin price fall as the worlds flagship cryptocurrency plunged from $61,778 to the $60,688 level. By now, BTC has somewhat recovered and is trading at $61,260 at the time of this writing.