The US Department of Justice is free to sell Silk Road Bitcoin after judge rejected all appeals blocking liquidation. Will BTC fall?
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is shaky at press time. Looking at price charts, the world’s most valuable coin has dropped nearly 8% in three days and is under pressure as of this writing. While support remains at $90,000, last day’s events could trigger a wave of lower lows.
According to a December 30 court filing, confirmed by DB News on January 8, Judge Richard Seeborg of the Northern District of California refused to hear the appeal of Battle Born Investments and other plaintiffs over ownership of 69,370 BTC worth over 4.33 billion dollars.
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 after the new administrator promised not to sell https://t.co/HqD1KnhJK3 pic.twitter.com/xn8ATSEL7H
— db (@level10k) January 9, 2025
The decision effectively grants the Department of Justice (DoJ) complete control over the stash delivered in 2020 by an unnamed individual with ties to the infamous “Silk Road” market.
Silk Road was shut down by US authorities in 2013. The market 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 plummeted today, dropping from around $95,000 at spot rates.
(BTCUSD)
The reaction was expected.
Now that the legal battle initiated by Battle Born Investment has concluded and the government controls the huge supply of BTC, there is speculation that the coin could come under enormous pressure in the coming weeks.
The US government often sells seized cryptocurrencies to bad actors and assets believed to be the proceeds of illegal activities. For this reason, the government would likely liquidate this lot (and others), selling it to willing buyers.
In the past, the government has attempted to dump Silk Road’s BTC stash 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 exploiting the Silk Road payment system.
(Source)
While there have been attempts to dump these coins, the government has taken a measured approach. In early 2023, they sold 10,000 BTC (of the initial 50,000 Zhong recovered) for $216 million.
Subsequently, it was decided that the remaining supply of 40,000 BTC would be sold in four tranches over the course of the year. However, there wasn’t much follow-up.
With the judge having rejected all appeals, the government can now liquidate the 40,000 BTC and more than 69,000 BTC sold in 2020 in what would be the largest dump in history, assuming they are all sold at once.
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Eyes will be on all transfers from the associated address.
The last time BTC was moved from government holdings was in late 2024, when 29,800 BTC (worth over $2 billion) was moved to Coinbase Prime. Of this, 10,000 BTC, or $594 million, were sold.
Data from Arkham Intelligence shows that the government still controls 198,109 BTC or $18 billion. This stash includes BTC confiscated from Silk Road.
(Source)
Any unexpected liquidation of $12.63 billion could hugely disrupt the market. The sudden sell-off could lower prices, especially if market demand isn’t enough to absorb the peak supply.
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The post The US Government Authorized the Sale of Silk Road Bitcoin: Will Prices Drop? appeared first on 99Bitcoins.