In 2020, the U.S. Department of Justice announced the seizure of 69,370 Bitcoins related to the dark web 'Silk Road.' According to the latest community news, the Department of Justice has been authorized to sell these Bitcoins, currently valued at $6.5 billion.
Established in 2011, Silk Road was the first modern dark web market, filled with many illegal transactions, including the sale of arms, drugs, identity passport information, etc. After being seized and shut down by U.S. law enforcement in 2013, the U.S. government seized 69,370 Bitcoins, marking the largest cryptocurrency seizure in U.S. history.
For a long time, the market has been focused on when these Bitcoins will be sold. According to a post by KOL db on X earlier, the U.S. Department of Justice has been authorized to sell these Bitcoins, currently valued at $6.5 billion.
An official confirmed to DB News today that the U.S. government has been authorized to liquidate 69,000 Bitcoins ($6.5 billion) from Silk Road.
Interestingly, less than two weeks after the new government took office, the government vowed not to sell.
Will it cause drastic fluctuations in the market?
Affected by this news, Bitcoin temporarily dropped over 1%, briefly falling below $94,000, but the decline did not seem to last, rebounding to $94,750 before the deadline.
On the other hand, although 69,000 Bitcoins is a large number, the U.S. Marshals Service previously stated that the government would sell the crypto assets in batches rather than all at once to minimize adverse impacts on the market. The Director of the IRS's Cyber and Forensic Services Division, Jarod Koopman, has also stated:
We do not participate in the market; our actions are basically determined by the timeline of legal procedures.
This means the Department of Justice will not sell immediately but will follow subsequent legal procedures. The U.S. government’s auction may also be conducted in a C2C manner; whether this will cause significant fluctuations in the secondary market still needs to be observed.
The U.S. government holds over 200,000 Bitcoins.
The U.S. government, which holds the largest amount of Bitcoin, has seized over 200,000 Bitcoins from cybercriminals and dark web markets during three different law enforcement operations from November 2020 to 2022. These Bitcoins are currently mainly stored in encrypted, password-protected offline cold wallets controlled by the U.S. Department of Justice, the IRS, or other agencies.
The main sources of Bitcoin seizures by the U.S. government are as follows:
In November 2020, 69,369 BTC were seized from the largest dark web market, Silk Road.
In January 2022, 94,643 BTC were seized from the Bitfinex hacker.
In March 2022, 51,326 BTC were seized from Silk Road hacker James Zhong. The U.S. government still holds 41,500 of these BTC.
