TL;DR
- The US government is preparing to sell $117M worth of BTC busted from the fallout of the Silk Road dark web market.
- The notice gives individuals except the defendants an opportunity to assert an interest in the forfeited property through an ancillary petition.
US Government Files Notice to Sell $117M Bitcoins
The US government is preparing for a mega sale of Silk Road’s Bitcoins (BTC). It filed a public notice on January 8, 2024, indicating it will sell nearly $117 million of Bitcoins.
The BTC coins were initially confiscated from the Silk Road darknet marketplace. A known online black market that specializes in money laundering and drug trafficking.
The US Government plans to sell them in two lots—2875 BTC, roughly $114.6 million, and 59 BTC, worth $2.4 million.
The seized bitcoin was roughly $133 million at the time of filing. All the BTC auctions will be under the supervision of the US Attorney General. The notice gives people, except the defendants, a chance to assert an interest in the forfeited property.
Those interested will do so through an ancillary petition in 60 days starting from January 10.
Ryan Farace, a Maryland native, owned the first set of Bitcoins. He is convicted on charges of money laundering conspiracy involving the dark web market sale of Xanax.
The indictment alleges that Farace distributed the drugs through sales on the dark web in exchange for Bitcoin.
Part of the DOJ statement said at the time.
The second lot belonged to Sean Bridges, a former Secret Service agent involved in the Silk Roads Investigations.
He is facing charges of stealing Bitcoins that the US government obtained previously. The move came after the US appeals court finalized a mandate in December 2023.
Notably, it formalizes the forfeiture of 69,370 Bitcoins relating to the now—obsolete Silk Road darknet market.
US Government Among the Largest BTC Holders
Acquiring an estimated 200,000 coins (approx. $5 billion) through criminal busts, the US government is among the largest BTC holders.
The seized cryptocurrencies are securely locked in an encrypted hardware wallet controlled by several federal agencies.
Many market watchers are skeptical about the US government holding BTC coins as a potential sale would impact the market massively.
In any case, the US government holding BTC is not due to timing or market speculation. But, it’s an accumulation of BTC through a lengthy legal process of seizing and managing these assets.
They don’t partake in active trading or time the market. Instead, their actions are influenced by the timing of the legal process.
What will Happen Next?
The crypto community is keenly monitoring these funds and is speculating how a massive sale of BTC would impact the crypto market.
Many believe the US government selling the seized Bitcoins from Silk Road would create more selling pressure on the BTC price.
And undoubtedly send ripples throughout the trillion-dollar digital asset market.
Following Bitcoin ETF approval by the SEC, the BTC price is facing major selling pressure, moving down under $40,000.
Even after Bitcoin ETFs saw $4.6 billion on their first day of trading, BTC’s price is still downward.
Many market analysts believe that the BTC price may correct itself by another 15% from the current levels.
Will Silk Road Bitcoin sale induce more BTC selling pressure on the market?
Shawn Munir
Shawn Munir is the CEO of Coinweb.com and spearheads all the collaborative partnerships for the platform. He bought his first Bitcoin in 2017 and never looked back. He is also an investor in 200+ Web3 startups and is considered an expert in the field. Before building Coinweb with his co-founders, he co-founded Presail, a management platform designed for companies and investors to manage their investments in Web 3. In addition to his entrepreneurial endeavors, Shawn serves on the United Nations...
