A U.S. appeals court has concluded a legal process, officially completing the seizure of 69,370 Bitcoin from the Silk Road, a formerly operational dark web marketplace.
In line with a court filing, the U.S. District Court of Appeals for the Ninth Circuit has affirmed the transfer of these Bitcoins to federal control. This action comes subsequent to a prior ruling that solidified the government’s entitlement to the digital assets linked to the illicit activities of the Silk Road.
The confiscated Bitcoin assets encompass not only Bitcoins but also include Bitcoin Gold (BTG), Bitcoin SV (BSV), and Bitcoin Cash (BCH). This marks the culmination of efforts to reclaim and secure these assets associated with the illegal operations of the Silk Road.
The Seizure of Silk Road’s Illegal Assets
The initial judgment regarding the Bitcoin linked to the Silk Road was rendered in August, stemming from the U.S. Justice Department’s 2020 seizure and subsequent official motion for forfeiture of the cryptocurrency. At the time of the judgment, the value of the confiscated Bitcoin exceeded $1 billion.
The legal action was prompted by the movement of 69,369 Bitcoins from a wallet address, representing the first significant activity involving these assets since 2015. This transaction garnered significant attention as the funds were traced back to the Silk Road, a platform notorious for its illicit trade in drugs and other illegal items.
The respondent in the filing was identified as Ross Ulbricht, the founder of the Silk Road. The FBI shut down the site following Ulbricht’s arrest in late 2013. In 2015, Ulbricht received a sentence of double life imprisonment plus 40 years, with no possibility of parole. This recent legal development represents a continuation of efforts to address the consequences of the Silk Road’s illicit activities and reclaim the associated cryptocurrency.
U.S. Government: One of the Largest Bitcoin Holders
The U.S. government has emerged as one of the significant holders of Bitcoin, a status attained through seizures tied to criminal activities. Cases like the Silk Road, originating from cybercriminals and darknet markets, have contributed to the government’s ownership of these confiscated digital assets, which are securely stored in offline, encrypted hardware wallets. Various federal agencies, including the Department of Justice (DOJ) and the Internal Revenue Service (IRS), are responsible for managing these holdings.
However, owing to the intricate and protracted legal procedures, the government does not actively engage in trading or attempt to time the market. The actual liquidation process can extend over several years. Throughout the legal proceedings, the government retains possession of the Bitcoin, either as evidence or as proceeds of the crime, reflecting a cautious and methodical approach to handling cryptocurrency seized in connection with criminal investigations.
