President-elect Donald Trump had vowed to establish a 'Bitcoin Reserve' and to 'never sell' bitcoins seized by the government, but just three weeks before he officially takes office, a federal court made a shocking ruling allowing the DOJ to sell 69,370 bitcoins (worth $6.5 billion) seized from the dark web market 'Silk Road'.
According to court documents dated December 30, Chief Judge Richard Seeborg of the Northern District of California denied Battle Born Investments' request to delay the sale of the 69,370 bitcoins, officially approving the DOJ to liquidate this asset.
As for why this court document was only made public now, the specific reason remains unknown, and the Department of Justice has declined to respond to media requests for comments on this matter.
The US Govt has been given the greenlight to liquidate 69,000 BTC ($6.5B) from Silk Road, an official confirmed to DB News today
Interesting situation less than 2 weeks away from the new admin who vowed to not sell https://t.co/HqD1KnhJK3 pic.twitter.com/xn8ATSEL7H
— db (@tier10k) January 9, 2025
The latest ruling confirms reports from October last year, when it was reported that the US government was authorized to sell bitcoins seized from wallets related to 'Silk Road'. However, even though the court has given the green light, the liquidation of this asset still requires multiple administrative procedures and may face appeals, making immediate sales unlikely in the short term.
In fact, some of the seized bitcoins have already begun to be disposed of in batches over the past few months. On December 3 of last year, the US government transferred nearly $2 billion worth of 'Silk Road' bitcoins to Coinbase, indicating that authorities are preparing to sell this substantial asset.
In this long judicial battle, the Department of Justice faces multiple challenges, including appeals to the Ninth Circuit Court and the Supreme Court.
Among them, the most controversial focus is the ownership claim from Battle Born Investments, which claims that the ownership of this asset should belong to them through bankruptcy proceedings related to the original holder.
The final twist in the case revolves around a request made under the Freedom of Information Act (FOIA) to uncover the identity of the mysterious figure 'Individual X', who voluntarily handed over this batch of bitcoins to the government in 2020.
According to court documents, these bitcoins are directly related to the dark web market 'Silk Road', which was shut down by federal authorities in 2013, and belong to the proceeds of illegal trading activities on that platform. With the final ruling in place, the sale of this asset is expected to become the largest cryptocurrency liquidation action in US government history.
The timing of this ruling being made public is quite intriguing, coinciding with a highly politicized sensitive period for US cryptocurrency policy. Donald Trump, who is set to take office on January 20, had vowed during his campaign to establish a 'Bitcoin Strategic Reserve' based on the bitcoins owned by the US government and to 'never sell'.
However, these newly released documents have also raised questions in the market about how the US government will handle this batch of assets, and whether Trump's administration will affect the liquidation process of these bitcoins remains uncertain.
"Rushing to 'sell coins' before Trump takes office? US court gives green light: allows the DOJ to sell 69,370 bitcoins" This article was first published in (Blockcast).
