Last week, the biggest news in the crypto world was that 69,369 BTCs linked to Silk Road had moved for the first time in years. This week, the news is that the Bitcoins have been seized by the US Government in what’s the biggest crypto bust in history.
The crypto assets are estimated to be worth almost a billion dollars. At the moment of writing, no one knows what the US Government is going to do with those Bitcoins. However, judging from past experiences, they are likely to sell them at auction in 2021.
Biggest Crypto Seizure in History
According to the US Department of Justice, the Bitcoins in question were seized from an account owned by “Individual X” whose identity is known to the Government. The person in question was not involved with Silk Road, the largest online black market which was shut down a few years ago.
Instead, Individual X got probably got ahold of the Bitcoins through hacking activities. Although it’s not yet been confirmed, the suspicion is that the hacker had gained unauthorized access to Silk Road, which enabled him to steal the Bitcoins.
The hacker transferred the Silk Road BTC to different crypto wallets, from where he had tried to convert them to fiat currency. His first attempt was in April 2015, when he sent 101 Bitcoins to unlicensed crypto exchange BTC-e.
The transfer of, what at the time was worth about $23,700, put him on the radar of the Department of Justice. Fast-forward to November 2020, and Individual X is moving the record BTC sum, prompting the Department of Justice to react.
Silk Road BTC Auction
The Bitcoins seized from Individual X’s wallets still isn’t legally owned by the US Government. For that to happen, the Department of Justice needs to prove in court that the Bitcoins are subject to forfeiture.
Officially titled the “United States of America vs Approximately 69,370 Bitcoin,” the case against Individual X is expected to win in court, although it remains to be seen how long the process will take.
The most probable scenario is that the court will come with its decision sometime in mid-2021, after which the Government will become the owner of the 69,370 BTCs.
If it happens, it’s not going to be the first time the Government has gotten into possession of Silk Road BTCs. In the past, the US had seized cryptocurrencies from the dark web on many occasions, although not in such a large amount.
In most cases, the Government decided to auction the BTCs, separating them into smaller chunks, then selling them to the highest bidders.
Considering that previous Silk Road BTC auctions dealt with relatively smaller amounts, they didn’t have any impact on the price of the most popular cryptocurrency. This time, however, it may be different.
Selling the Bitcoins worth nearly one billion dollars at the moment of writing (the price might go up before the auction) could shake up the crypto market, making it more volatile than ever.