SilkRoad Bitcoins. Whose coins are the US government auctioning off

SilkRoad Bitcoins. Whose coins are the US government auctioning off

The US government owns almost $3 billion worth of bitcoins, and a significant part of them is somehow connected with the confiscation of coins in the case of the first illegal online marketplace

Silk Road was the first anonymous online marketplace for the sale of illegal goods — from drugs to forged documents. The site used bitcoins for payments between sellers and buyers and was located in a dark segment of the Internet, which uses the anonymous Tor network to access. During the operation of Silk Road, the turnover of drugs and other illegal goods through the site reached $213 million at the bitcoin exchange rate at the time of its operation (on average, about $20 per 1 BTC).

In October 2013, Silk Road was liquidated by operatives of the Federal Bureau of Investigation (FBI), the Drug Enforcement Agency (DEA) and the US Internal Revenue Service (IRS). Silk Road founder Ross Ulbricht, also known under the pseudonym Dread Pirate Roberts, was arrested and charged with drug trafficking, money laundering and the creation of a criminal community. In February 2015, he was sentenced to life in prison.

The official notification indicates that the US Government plans to sell two lots of bitcoins confiscated during the investigation of the Silk Road case. The first lot includes about 2,800 BTC, valued at $129 million. The second, smaller lot includes 58 BTC, valued at about $3 million.

Both lots are associated with former special agent Sean Bridges and drug dealer Ryan Faras, who were convicted, among other things, of laundering bitcoins obtained on Silk Road, but were not directly related to the site.

Sean Bridges was an agent of the US Secret Service and was part of the task force investigating illegal activities on Silk Road. During the investigation, when the site was still operating, he extorted money from Ulbricht under various pretexts to stop the investigation against him. In 2015, Bridges was arrested and sentenced to six years in prison. He was released in December 2021.

In March 2023, the U.S. Marshals Service (USMS) held a closed auction for James Zhong's confiscated bitcoins. The US authorities sold about 9,861 BTC out of a total amount of 50,000 bitcoins, raising more than $215 million. Only registered participants who had previously made a deposit of $200 thousand with a minimum bid of $100 thousand could participate in the auction..

The auction was divided into several lots of bitcoins, ranging in volume from 100 to 1 thousand coins. The government decided to sell only a part of the confiscated bitcoins in order to avoid a negative impact on the cryptocurrency exchange rate.

As of January 2024, the US authorities still have about 41 thousand bitcoins, one way or another related to the Silk Road case. At the current bitcoin exchange rate of $40 thousand, the sale of the remaining coins can bring about $1.5 billion.

Source: RBC

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