- The US Department of Justice plans to sell 69,370 Bitcoin seized in connection with the darknet marketplace Silk Road.
- The announcement has already caused crypto prices to fall; Analysts fear further market destabilization.
- The timing of the sale is causing speculation and debate as Donald Trump takes office on January 20th and wants to launch a Bitcoin reserve.
Background: Silk Road and the Bitcoin seizure
Silk Road was a darknet marketplace founded in 2011 by Ross Ulbricht under the pseudonym “Dread Pirate Roberts”. Illegal goods and services, mainly drugs, were traded anonymously via the platform. In 2013, Silk Road was closed by US authorities and Ulbricht received a life sentence.
During the course of the investigation, the US Department of Justice (DoJ) confiscated large quantities Bitcoinwho were associated with Silk Road. A significant portion of these cryptocurrencies were stolen by a hacker known as “Individual X” and later confiscated by authorities.
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Court decisions pave the way for the sale
On October 7, 2024, the US Supreme Court rejected an appeal involving the claim to the seized 69,370 Bitcoin. Investment firm Battle Born Investments had previously tried to block the sale but failed in court. The DoJ argued that Bitcoin’s volatility required it to be sold quickly to make the best possible returns.
The announcement of the planned sale has already had an impact on the crypto market. Analysts warn that such a large liquidation could put additional pressure on the market, which could lead to further destabilization.
The planned sale of Bitcoin has also sparked political discussions. Some observers suggest that the proceeds could be used to support international projects, in line with the foreign policy priorities of the current US administration. However, there are no official confirmations of such plans.
The timing seems a bit strange, however, as Donald Trump is taking office in less than two weeks and has announced a Bitcoin reserve with the confiscated BTC. It seems like they want to sell quickly before Donald Trump takes over in the US.