John Deaton Criticizes U.S. Government's Bitcoin Transaction Amid SEC-Coinbase Controversy
SEC-Coinbase Controversy
Cryptocurrency advocate John Deaton, known for his support of Bitcoin and XRP, has voiced his opinion on the recent quarter-million-USD Bitcoin transaction made by the U.S. government to the Coinbase (NASDAQ) exchange. This transaction is part of the funds confiscated in 2013 from the Silk Road dark web marketplace when it was shut down, and its founder Ross Ulbricht was arrested and sentenced to two lifetime prison terms.
Government's Confiscated Bitcoin Sale
The U.S. government sent 3,940 BTC, worth approximately $241.22 million, to Coinbase to be sold. These funds were initially confiscated from a drug trafficker on Silk Road and were forfeited at trial in January 2024. This sale follows a similar transaction in March last year when the U.S. government sold 9,861 BTC for $216 million.
Deaton's Criticism and SEC's Stance on Coinbase
John Deaton took to his account on the X social media platform to criticize this move, calling it “nonsense coming from our government.” He pointed out the inconsistency in the actions of Gary Gensler, chairman of the U.S. Securities and Exchange Commission (SEC), who has labeled Coinbase's business illegal for trading altcoins, which he refers to as “unregistered securities.” Gensler has “declared war” on Coinbase, setting forth charges against the exchange in June last year. In response, Coinbase filed a lawsuit against the regulator.
Government's Continued Use of Coinbase Services
Despite Gensler’s stance, the U.S. government continues to use the services of Coinbase Prime, the largest U.S.-based crypto exchange. Deaton highlighted the contradiction in the government’s actions, noting that while officials like Gensler and Senator Warren stand against the cryptocurrency space, they still rely on Coinbase for significant transactions.
Impact on Bitcoin Price
Cryptocurrency journalist Colin Wu reported that following the transaction, the U.S. government still owns 213,546 BTC confiscated from Silk Road, worth more than $13 billion. The founder of on-chain data aggregator CryptoQuant believes this sale will have minimal impact on Bitcoin’s market price. However, the transaction coincided with a 1.76% drop in Bitcoin’s price, plunging from $61,778 to $60,688. At the time of writing, Bitcoin has somewhat recovered and is trading at $61,260.
