U.S. Government to Auction $117 Million in Seized Bitcoin

Table of Contents

• Massive Amount of Crypto Assets From Silk Road Case
• Background on Silk Road Case

Massive Amount of Crypto Assets From Silk Road Case

The U.S. government plans to auction off nearly 3,000 bitcoin worth approximately $117 million that were seized from dark web drug marketplace Silk Road operators. The Bitcoin haul stems from a 2021 criminal case involving major players in the infamous online drug market Silk Road.

According to forfeiture notices by the U.S. Department of Justice, 2,875 BTC were seized from Ryan Farace and Sean Bridges in a drug bust, and an additional 59 BTC from Farace alone. At the time of filing, the value of the Bitcoins was approximately $133 million. The auction represents one of the largest-ever liquidations of seized crypto assets by the U.S. government.

Farace, who went by the name “Xanaxman” on Silk Road, admitted to distributing illicit substances through the dark web marketplace and accepting Bitcoin as payment. Both he and his father Joseph Farace have been sentenced to federal prison for their roles in the operation.

Interested parties have 60 days to claim an interest in the forfeited Bitcoins before the government auction is carried out. A U.S appeals court finalized the forfeiture of nearly 70,000 Bitcoin related to Silk Road in December 2021, paving the way for the upcoming auction.

Background on Silk Road Case

Silk Road was shut down by the FBI in 2013 for facilitating the sale of illegal drugs and other contraband goods. The dark web marketplace’s use of Bitcoin for anonymous transactions catapulted cryptocurrency into the mainstream. It is estimated that Silk Road processed over 614,000 Bitcoin in commissions during its operation. Ross Ulbricht, the founder of Silk Road, is serving a double life sentence in prison.

The U.S. government is one of the largest holders of Bitcoin globally, with approximately 200,000 coins worth around $5 billion. Seized digital assets are stored offline in encrypted hardware wallets by federal agencies. The decision to liquidate Bitcoin holdings through auction is based on legal procedures, not market timing.

While seizures have increased the government’s crypto holdings, the value of Bitcoin has also risen dramatically over time. After selling portions of its Bitcoin stash, the U.S. government maintains a position worth over $5 billion, though it does not actively trade or attempt to time the cryptocurrency markets.

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