US Government Dumps Bitcoin Stolen From Silk Road, $1.2B To Go
The US government has been busy selling Silk Road’s bitcoin, but it still has loads more to liquidate over the course of the year
WEIBEL Christophe/Shutterstock, modified by Blockworks
The US government sold off more than 9,800 BTC connected to the Silk Road darknet marketplace for about $215 million earlier this month, a court filing released Friday shows.
James Zhong pleaded guilty to hacking Silk Road in 2012 and stealing more than 50,000 BTC (worth less than $1 million at the time), which the government seized in November 2022.
“In total from the Zhong investigation, the Government has obtained final orders of forfeiture for approximately [51,680.32 BTC], valued at over $3.4 billion at the time of seizure,” the court filing noted.
On March 14, the government sold about 9,861.2 BTC for around $21,800 per token. On this date, bitcoin was trading on most exchanges at a high of around $26,500 and a low of around $24,000, according to Blockworks Research.
Government officials racked up more than $215,000 in transaction fees for the sale, court documents note. Officials added that they plan to sell the remaining 41,500 BTC ($1.2 billion) in a series of four batches this year. The method of sale wasn’t disclosed.
It is not the first time the US has sold off seized crypto. In 2014, officials unloaded around 30,000 BTC, also taken in connection with Silk Road, to venture capitalist Tim Draper.
The BTC was valued at around $17 million at the time of the auction, but today would be worth more than $850 million. A dashboard tracking US government bitcoin auctions estimates more than $5 billion has been left on the table by selling BTC too early.
Bitcoin was trading about 1% higher Friday afternoon in New York following the release of the court filing, hovering around $28,450.
US authorities shut down Silk Road in October 2013, arresting maintainer Ross Ulbricht. He was given a double life sentence two years later without possibility of parole.
Updated Mar. 31, 2023 at 12:10 pm ET: Added auction dashboard.
Get the news in your inbox. Explore Blockworks newsletters:
- The Breakdown: Decoding crypto and the markets. Daily.
- 0xResearch: Alpha in your inbox. Think like an analyst.
- Empire: Crypto news and analysis to start your day.
- Forward Guidance: The intersection of crypto, macro and policy.
- The Drop: Apps, games, memes and more.
- Lightspeed: All things Solana.
- Supply Shock: Bitcoin, bitcoin, bitcoin.
