The US DoJ is free to sell Silk Road Bitcoin after the judge rejects all appeals blocking the liquidation. Will BTC fall?
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is fragile at the time of going to press. Looking at price charts, the world’s most valuable coin is down almost 8% in three days and under pressure at press time. Although support remains at $90,000, the events of the past day could trigger a wave lower.
According to a Dec. 30 court filing, confirmed by DB News on Jan. 8, Judge Richard Seeborg of the Northern District of California declined to hear Battle Born Investments and other plaintiffs on appeal regarding ownership of 69,370 BTC of a worth more than $4.33 billion.
The US government has received the green light to liquidate 69,000 BTC ($6.5 billion) from Silk Road, an official confirmed to DB News today.
Interesting situation less than 2 weeks from the new administrator who has sworn not to sell pic.twitter.com/xn8ATSEL7H
– database (@tier10k) January 9, 2025
The decision effectively grants the Department of Justice (DoJ) full control over the stash surrendered in 2020 by an anonymous individual with ties to the infamous “Silk Road” market.
Silk Road was shut down by US authorities in 2013. The marketplace allowed people to illegally trade narcotics and weapons, with payment made in BTC. At that time, BTC was in its infancy.
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Following this news, Bitcoin prices fell earlier today from around $95,000 at spot rates.
(BTCUSDT)
The reaction was expected.
Now that the legal battle organized by Battle Born Investment is over and the government controls the massive BTC reserve, there is speculation that the coin could come under immense pressure in the coming weeks.
The United States government often sells confiscated crypto assets to bad actors and assets deemed to be the proceeds of illegal activities. For this reason, the government would likely liquidate this lot (and others) and sell it to willing buyers.
In the past, the government tried to get rid of Silk Road’s BTC reserve, without success.
In 2022, the Department of Justice seized over 50,000 BTC and arrested James Zhong. In 2012, Zhong pleaded guilty to wire fraud for operating the Silk Road payment system.
(Source)
Although there have been attempts to get rid of these coins, the government has taken a measured approach. In early 2023, they sold 10,000 BTC (of the initial 50,000 BTC collected from Zhong) for $216 million.
Then it was decided that the remaining reserve of 40,000 BTC would be sold in four tranches throughout the year. However, there hasn’t been much follow-up.
With the judge rejecting all appeals, the government can now liquidate the 40,000 BTC and over 69,000 BTC returned in 2020 in what would be the largest load shedding in history – assuming they are all sold at once .
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Eyes will be on any transfer from the associated address.
The last time BTC was removed from government holdings was in late 2024, when 29,800 BTC (valued at over $2 billion) was transferred to Coinbase Prime. 10,000 BTC, or $594 million, were sold.
Arkham Intelligence data shows the government still controls 198,109 BTC, or $18 billion. This stash includes BTC confiscated from Silk Road.
(Source)
Any unexpected liquidation of the $12.63 billion could massively disrupt the market. The sharp sell-off could depress prices, especially if market demand is insufficient to absorb the increased supply.
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US Government Cleared to Sell Silk Road’s Bitcoin: Will Prices Drop? appeared first on 99Bitcoins.
