The U.S. government has been approved to sell $6.5 billion worth of Bitcoin seized from the "Silk Road." Trump promised to address the embarrassment, and industry insiders say they are ready to buy the dip
The news broke less than two weeks after Trump's new administration officially took office. According to analysis from on-chain monitoring platforms, it is expected that the U.S. government will need several months to begin liquidating the Bitcoin seized from the "Silk Road," and analysts generally believe that the selling pressure will be quickly absorbed by the market.Author: Weilin, PANews
On January 9, according to DB News, the U.S. Department of Justice has been authorized to sell $6.5 billion worth of Bitcoin seized from the "Silk Road" dark web market. Following the news, the price of Bitcoin dropped from $950,000 to below $940,000, and as of January 9 at 1:05 PM, it rebounded to $94,258, down 1.93% for the day.
It is noteworthy that this news broke less than two weeks after the official inauguration of the Trump administration, during which Trump vowed at last year's Bitcoin conference not to allow the U.S. government to sell any Bitcoin and promised to classify Bitcoin as a strategic reserve asset for the United States.
However, it appears that this ruling alone does not guarantee immediate liquidation, as federal asset forfeiture in the U.S. involves multiple administrative steps and potential appeal windows. According to analysis from on-chain monitoring platforms, it is expected that the U.S. government will need several months to begin liquidating the Bitcoin seized from the "Silk Road," and analysts generally believe that the selling pressure will be quickly absorbed by the market.
DOJ Authorized to Liquidate Bitcoin Seized from Silk Road
On October 7 last year, the U.S. Supreme Court declined to hear the case regarding the ownership of 69,370 BTC (approximately $4.33 billion) seized from Silk Road, allowing the government to have complete control over the seized funds. The court's decision likely paves the way for the U.S. government to sell these Bitcoins. At that time, the valuation of these Bitcoins was $4.4 billion. The U.S. Marshals Service is expected to be responsible for managing the liquidation process. Once confirmed, this will become one of the largest seized cryptocurrency sales in history.
According to DB News, here are the key points of the event:
Official confirmation that a U.S. federal judge ruled on December 30, 2024, that the Department of Justice (DOJ) can sell 69,370 Bitcoins seized from the "Silk Road" dark web market.
The long-standing dispute over the ownership of these seized Bitcoins has ended, and Battle Born Investments failed to delay the sale. The company claimed to own these Bitcoins through a bankruptcy estate and lost a Freedom of Information Act (FOIA) lawsuit that failed to reveal the identity of "Mr. X," who originally surrendered the Bitcoins.
Lawyers for Battle Born called this a "further example of the DOJ abusing civil asset forfeiture procedures" and accused the government of "relying on procedural tricks to ensure the truth is never made public."
The DOJ pushed for permission to sell these assets citing Bitcoin price volatility. When asked about the next steps, a DOJ spokesperson stated, "The government will continue to move forward based on the ruling in this case."
The seized Bitcoins are currently valued at approximately $6.5 billion.
The court's ruling effectively upheld a decision made by the U.S. District Court for the Northern District of California in 2022, ordering the government to liquidate these Bitcoins under current law. The case was brought by Battle Born Investments, which argued that it had rights to the Bitcoins through a bankruptcy estate related to Silk Road. Battle Born claimed that these Bitcoins were stolen by an individual known as "Individual X," who allegedly took the funds from Silk Road.
Less Than Two Weeks After Trump's Inauguration, His Crypto Promises Face Embarrassment
Dramatically, this comes less than two weeks after the official inauguration of the new Trump administration, during which Trump vowed not to sell any Bitcoin.
As early as last July, when Trump attended the Bitcoin conference, he stated that he would seek to reduce the sentence of Silk Road founder Ross Ulbricht. Ulbricht was sentenced to life in prison for operating the "Silk Road market," where customers used virtual currency to purchase illegal drugs and hacking tools.
At last year's Bitcoin conference, Trump vowed that if he returned to the White House, he would ensure that the government retains 100% of its Bitcoin holdings and would classify Bitcoin as a strategic reserve asset for the United States. "For too long, our government has violated a fundamental rule that every Bitcoin player remembers: never sell your Bitcoin," Trump said during his keynote speech at the Bitcoin conference in Nashville.
The Silk Road was the first modern dark web market. Founded in 2011 by its American creator Ross Ulbricht under the pseudonym "Dread Pirate Roberts," the market operated as a hidden service on the Tor network, allowing users to anonymously buy and sell goods and services. All transactions were conducted using Bitcoin. The site became known for its illegal drug trading market, as well as other illegal and legal goods. From February 2011 to July 2013, the Silk Road facilitated transactions totaling approximately 95,200 Bitcoins.
In October 2013, the FBI shut down the Silk Road website and arrested Ulbricht. In November of the same year, Silk Road 2.0 was launched, operated by other administrators of the original site, but was shut down again the following year due to "Operation Onymous." In 2015, Ross Ulbricht was convicted in federal court on multiple charges related to operating the Silk Road and was sentenced to two life terms without the possibility of parole.
Industry Executives: Call for Calm, Buying Opportunity May Be Here
On January 9, on-chain analyst Trader T stated on the X platform that regarding the "U.S. government has been authorized to liquidate 69,370 BTC seized from the dark web Silk Road," it may take several months from authorization to actual sale.
Additionally, Spot On Chain noted that the U.S. government currently holds approximately 197,000 BTC, and previous sales were conducted through over-the-counter transactions, so they did not directly impact prices, but the resulting market panic could lead to a temporary price drop.
HODL15Capital mentioned in their analysis that they have confirmed on-chain that the BTC held by the U.S. has not been transferred or sold.
CryptoQuant CEO Ki Young Ju posted on X, stating, "Based on actual market value, the funds entering the market last year amounted to $379 billion, about $1 billion per day. The $6.5 billion sold by the U.S. government can be absorbed in just a week. Don't panic."
On January 9, regarding the "U.S. DOJ authorized to sell $6.5 billion in seized Silk Road Bitcoin," BitMEX co-founder Arthur Hayes posted on the X platform that diamond hands are ready to buy the dip.
