By
Chimamanda U. Martha
April 26th, 2024
The US government confiscated Bitcoin holdings associated with the Silk Road marketplace in two instances, first in Memphis, Tennessee, on February 10, 2021, and then in Arlington, Virginia, on May 11, 2021.
On Thursday, January 25, the US government filed a notice to sell nearly $130 million worth of Bitcoins seized from the fallout of the Silk Road darknet marketplace. The government is planning to sell this in two lots of Bitcoins under the direction of the US Attorney General.
As said, the sale of the Bitcoins will likely happen in two lots – 2874 BTC valued at $129 million along with 58 BTC with a value of $3.3 million. The notice text provides an opportunity for individuals, excluding defendants, to assert an interest in the forfeited property via an ancillary petition in a period of 60 days from January 10.
Additionally, it allows for petitions seeking remission, which could result in pardoning some or all of the seized Bitcoin from forfeiture. Previously, the Bitcoins belonged to two individuals associated with the notorious Silk Road.
The first lot of Bitcoins belonged to Ryan Farace, a Maryland native who was convicted along with his father on charges of money laundering conspiracy that involved the darknet market sale of Xanax. The smaller and the second lot of bitcoins belongs to Sean Bridges, a former US Secret Service Special Agent involved in Silk Road investigations. Bridges also faces charges of stealing Bitcoins obtained by the US government, previously.
The Seizure of Bitcoin from Silk Road
The US government has seized Bitcoin holdings linked to the infamous Silk Road marketplace in two separate incidents. The first lot was confiscated on February 10, 2021, in Memphis, Tennessee, followed by another seizure on May 11, 2021, in Arlington, Virginia. Furthermore, the District Court in Maryland finalized the condemnation and forfeiture of the Bitcoin to the US government on January 8, 2024.
These seized funds represent only a fraction of the total Silk Road-related assets the US government has confiscated so far. In addition to early seizures connected to Silk Road creator Ross Ulbricht in 2013, the US government took possession of $3.6 billion worth of Bitcoin from James Zhong in 2022. This was in addition to another $1 billion of Bitcoin back in 2020.
As of December 2023, the US government held approximately $9 billion worth of Bitcoins. However, this sum includes Bitcoins derived from different sources in addition to Silk Road-related seizures.
The US government selling these Bitcoins seized from Silk Road could create further selling pressure on the BTC price. Ever since the Bitcoin ETF approval, the BTC price has faced significant selling pressure slipping under $40,000. Some market analysts expect the BTC price to correct another 15% from the current levels.
