The United States government plans to sell over 41,000 Bitcoins that were confiscated from Silk Road hacker James Zhong, according to a court document filed on March 31, 2023. The government seized over 50,000 BTC from Zhong in November 2022, and the defendant pleaded guilty to wire fraud in September 2012. The filing reveals that the government holds 205,515 BTC, and it plans to sell at least 41,490 BTC worth $1.17 billion at today’s exchange rates in 2023.
The government has already started liquidating the BTC confiscated from the Silk Road marketplace before Judge Schofield. On March 14, 2023, the government sold 9,861.1707894 BTC from the 51,351.89785803 BTC confiscated in the Ulbricht case, for a total of $215,738,154.98. The remaining 41,490.72 BTC is expected to be liquidated in four more batches over the course of this calendar year.
The sale of 9,861 BTC was detected by Glassnode, an onchain analytics firm, or at least the period of time when it was sent to a major exchange prior to selling. The funds were likely sent to Coinbase, which could indicate a shift in the government's auction style of selling seized crypto assets. Once the government sells the 41,490 BTC, it will still have 164,025 BTC, or $4.65 billion worth, remaining.
The U.S. government's plan to sell a large portion of its seized Bitcoin holdings is a significant move in the crypto world, and it will undoubtedly impact the market. The government has been holding on to these assets for years, and the sudden sell-off could lead to a drop in Bitcoin's price. On the other hand, it could also create a buying opportunity for investors who believe in the long-term potential of the cryptocurrency. The government's actions also highlight the need for clear regulations surrounding cryptocurrencies, especially when it comes to seizure and liquidation by authorities.
