The United States government intends to liquidate 41k Bitcoins linked to the Silk Road. The US Department of Justice (DOJ) declared on March 29, 2023, that it plans to sell more than 41,500 Bitcoins confiscated from the nefarious website Silk Road. At the time of the announcement, the overall BTC to be sold was valued at $2.3 billion.
How is the 41k Bitcoin Liquidation Going to Happen?
On March 14, 2023, 9,861.1707894 BTC out of 51,351.89785803 BTCs were sold for $215,738,154.98. The funds raised to the government were $215,522,416.83 after transaction costs.
Over this year, the balance, or around 41,490.72 BTC, will be liquidated in four additional phases. However, the government still needs to notify the second wave of liquidation; the exact date is unknown.
According to information in court records, the government intends to sell Bitcoin in four distinct batches this year. The report showed that the authorities had started selling 51,351.89 BTC forfeited in the Ulbricht case.
On March 14, 2023, the authorities sold 9,861 Bitcoin for $215 million. The government intends to liquidate the remaining BTCs this year in four separate batches.
The first round of the US government’s liquidation (sale) of the Bitcoin forfeited in the Ulbricht case occurred on March 14. The second wave of liquidation won’t be sold before Zhong’s sentence date, according to IRS Criminal Investigation – Asset Recovery & Investigative Services, according to the government.
Notably, Bitcoin was valued at about $25k on March 14, 2023, indicating that the government likely conducted some Kind TWAP that terminated that day. Although it is unclear what this implies for the future of Bitcoin, the US government is undoubtedly moving to destroy all Bitcoin linked to the Silk Road, and it is anticipated that it will do so throughout this year.
The Silk Road Case’s History
The illegal market website Silk Road was well-liked by cryptocurrency users from 2011 to 2013. Using the cryptocurrency Bitcoin, this website makes it easier to buy and sell illicit items, including drugs, firearms, and other criminal services.
In October 2013, the FBI shut down Silk Road and seized about 144,000 Bitcoins worth $122 million.
The Bitcoin Money Will Support Government Initiatives
The DOJ said they would begin selling Bitcoin in the coming weeks, with the money raised towards funding government initiatives. Within hours of the news of this sale, the price of Bitcoin increased by 5%.
The government intends to sell Bitcoins in several tranches because there are so many of them to prevent the market from being impacted. To sell Bitcoin, the DOJ will also cooperate with cryptocurrency exchanges.
Impact on the Cryptocurrency Market Due to the Selling
Even if Bitcoin’s value has risen in the hours since the news, some cryptocurrency market analysts believe that a sell-off of this magnitude could have a detrimental long-term impact on the sector. This results from worries about how the significant sell-off in Bitcoin may impact the value of other digital currencies.
To lessen any unfavorable effects on the market, the DOJ promised to sell Bitcoins responsibly. They have also hired a respectable financial institution as a consultant to assist with the Bitcoin sale.
The US will auction off over 41,000 Bitcoins worth $2.3 billion that was taken from the criminal marketplace Silk Road in the coming weeks. Bitcoin’s price has increased as a result of this statement, but there are worries about what this sell-off may mean for the cryptocurrency market in the long run. The DOJ promised to operate responsibly and with diligence to lessen any unfavorable market effects.