Van Buren Capital’s Scott Johnsson

Scott Johnsson, general partner and legal counsel at Van Buren Capital, believes that the U.S. government’s decision to transfer Bitcoin linked to the recently bankrupt Silk Road online marketplace to a Coinbase address means the funds are in danger of being sold.

The financial lawyer suggested in a post on X on August 16 that the U.S. Marshal Service, the agency tasked with disposing of digital assets seized and confiscated from criminal activities, is likely in the process of selling Bitcoin (BTC) seized from the Silk Road marketplace.

Yes, the US Marshal Service (USMS) is almost certainly selling silk road bitcoin. Joey is right (at least at the moment). The USMS sends BTC to a custody address under the terms of the service agreement it entered into with Coinbase in June. Given…

— Scott Johnsson (@SGJohnsson) August 16, 2024

Johnsson was responding to a post by Founders Fund co-founder Joey Krug, who shared data from Bitcoin explorer Tokenview showing that more than 19,000 BTC had been transferred to a Coinbase account. The lawyer appeared to agree with Krug’s claim that the coins were Silk Road holdings that had yet to be sold.

Johnsson’s claim comes just after the U.S. government transferred approximately $594 million worth of Bitcoin seized from Silk Road to a Coinbase Prime address, according to data from Arkham Intelligence.

Silk Road founder Ross William Ulbricht was arrested shortly after the marketplace was shut down in 2013.

Later, the administrators of the original site created a new site called Silk Road 2.0, but a special police task force shut down that site in 2014.

According to Johnsson, USMS transfers assets to the custody address under a service agreement established with Coinbase in June.

The lawyer claimed that the agreement required USMS assets to be kept completely separate, and that transfers to mixed exchange addresses like Coinbase Prime meant the institution was likely preparing to sell its BTC holdings.

The lawyer shared images from the report by the US Department of Justice Office of the Inspector General in his post. The report stated that the USMS’s Complex Assets Unit is obligated to liquidate assets within five business days after they are seized.

Johnsson predicts that formal approval of the sale could come with the Justice Department’s fiscal year 2024 asset forfeiture program report, which is expected to be released in January 2025.

Interestingly, the USMS’ decision to divest Silk Road Bitcoin comes after former US President and Republican presidential candidate Donald Trump recently promised in a speech that if he were to be elected for a second term, the government would not sell any of its Bitcoin holdings.

The US reportedly holds around $12 billion worth of BTC, making it the largest state-owned cryptocurrency holder. The cryptocurrency’s current market cap is $1.17 trillion.