Good day everyone,
I hope you are all having a good day, welcome to CryptoGod-1's blog on all things crypto. In this post I will be looking at the news of the United States Government being given court approval to sell their $6.5 Billion worth of Bitcoin seized from the Silk Road before Donald Trump takes up his roles as President.
US Govt Cleared to Liquidate Silk Road Bitcoin
The United States Department of Justice (DOJ) has been granted approval by a federal judge to sell 69,370 Bitcoin which were seized from the Silk Road marketplace on the dark web. This decision was issued by the federal judge from the Northern District Court of California back on the 30th of December 2024 and means the DOJ will be able to convert the Bitcoin into United States Dollars.
While the sale would be considered a coup and a major financial recovery for the government, it also comes just days before the new Trump administration is due to take control. Trump and his team had previously pledged to stop all sales of Bitcoin once he takes office but this move could happen without the say of the soon to be president.
It is believed the funds could be used to support law enforcement initiatives while they could also be used to help compensate victims of crimes related to Silk Road. Currently the United States government holds 198,000 Bitcoin, which is worth about $18.50 billion. The price of Bitcoin is trading at $92,812 at the time of writing and shows the reaction of the market to the news.
Following the news some have speculated that the outgoing Biden administration could decide to sell all of the governments Bitcoin in a move which would be politically motivated and as a potential change to sabotage the incoming Trump presidency. It is understood that Biden is instructing the DOJ to dump the Bitcoin on the market ahead of Trump taking over as president, fully aware that the new administration may then be forced to purchase the Bitcoin back at higher prices.
So far there have been new new Bitcoin sales according to Arkham Intelligence. The Blockchain intelligence platform have confirmed that the billions seized by the FBI as part of the Silk Road operation remain in a United States government controlled address. They shared this information on the 9th of January as rumours of the sale had been circulating following the reports of the DOJ clearance to sell the Bitcoin.
These rumours only emerged this week even though the decision was made on the 30th of December, adding to the suspicion that Biden and co are aiming to thwart any potential Bitcoin reserve by the Trump administration. Trump has already promised to retain all of America's Bitcoin holdings and place them in a reserve, and his plan has been adopted by Senator Cynthia Lummis and tabled in the US Senate. With Trump's swearing-in ceremony set for the 20th of January it remains unclear whether or not the US government will go ahead and sell the Bitcoin in the final days of President Joe Biden’s administration.
https://x.com/arkham/status/1877374337491087378
Complications which had previously held back any potential sale of the Silk Road Bitcoin had been due to a contentious legal battle in which a company called Battle Born Investments claimed ownership of the digital assets through a bankruptcy estate. Battle Born Investments argued that they had lawfully acquired rights through a bankruptcy estate tied to Raymond Ngan. This was who they believed to be the “Individual X” and accused of stealing cryptocurrency from Silk Road. It was back in 2013 that Silk Road was closed and throughout their process Battle Born Investments have been rejected at every stage of their legal pursuit. Back in 2022 they lost in district court and then suffered another defeat in 2023 when the US Court of Appeals ruled against them. Following that the Supreme Court decided to decline the case and it has ultimately ended their attempt to secure the Bitcoin.
The attorney for Battle Born has openly criticised the DOJ for their tactics in this case and labelled them as “another egregious example of the DOJ’s abuse of the Civil Asset Forfeiture process” and alleging that the government “resorted to procedural trickery.”
The court ruling was handed down by chief US district judge Richard Seeborg on the 30th of December which will pave the way for the DOJ to sell the Bitcoin. It could go down as one of the largest government crypto liquidations ever. As part of their request the DOJ cited price volatility and a DOJ spokesperson stated that the government will proceed in line with the court’s judgment.
A bulk sale of Bitcoin from the government could have the potential to impact the market. It could push prices down as the supply increases, but in the past the DOJ has been known to sell seized assets in smaller bulks to reduce market disruption.
https://x.com/tier10k/status/1877176406905356670
The United States government has already missed out on large profits by selling Bitcoin in the past. They have sold approximately 195,092 BTC over the years, generating roughly $366.5 million in revenue. However, given the current prices of Bitcoin if they had held on to them then it would currently be worth an estimated $18.25 billion. That is before even considering the impact their would have been if those Bitcoin had not been put back on the market, meaning the price likely would have been higher. Last year Germany sold around 50,000 Bitcoin when the price was still below $50,000 and mistiming a market sale can be quite embarrassing for governments.
Have a great day.
Peace. CryptoGod-1.
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