US Government Sells $215M in Seized Silk Road Bitcoin, Plans to Dump Another $1.1 Billion

The crypto markets may be looking uncertain right now but some are still making money from Bitcoin sales: the U.S. government. 

According to court documents filed today, the Feds sold the crypto earlier this month—making over $215 million. 

The crypto in question came from the Silk Road marketplace. Hacker James Zhong confessed to stealing it, and then cops then took it in a historic seizure back in November. They are now selling it—and they still have 41,490 Bitcoins ($1.1 billion) to get rid of, the filing said.

“With respect to the 51,351.89785803 Bitcoin forfeited in the Ulbricht case before Judge Schofield, the Government has begun liquidating (selling) it,” Friday’s document read. 

“On March 14, 2023, the Government sold 9,861.1707894 BTC (of the 51,351.89785803 BTC) for a total of $215,738,154.98. After $215,738.15 in transaction fees, the net proceeds to the Government were $215,522,416.83.”

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The “Ulbricht case” refers to Silk Road founder Ross Ulbricht, who was sentenced to life in prison back in 2015 in a high-profile case. 

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Ulbricht ran the Silk Road online black market which was used to—mostly—buy and sell illegal drugs before authorities shut it down in 2014. 

James Zhong pleaded guilty last year to wire fraud after the government alleged that he manipulated the Silk Road transaction system in 2012 to pocket 50,676 Bitcoins. He kept the stash hidden for 10 years until it ballooned to hit a value of $3.3 billion. 

“The defendant had in his possession multiple computer servers, virtual private networks, among other things, enabling him to commit the offense,” prosecutors added in Friday’s filing. “He then managed to keep the Bitcoin protected, and his identity hidden for several years.” 

With the authorities planning to get rid of the remaining Bitcoin throughout 2023 in four different batches, what kind of effect might that have on the price of the biggest digital asset amid a brutal bear market?