British operator Banmeet Singh, the operator of the dark web Silk Road, pleaded guilty to US authorities on January 26th. This case involves the largest Bitcoin seizure operation in the history of the US Drug Enforcement Administration (DEA), with nearly 8,100 Bitcoins confiscated.
US Department of Justice announced on January 26th that Banmeet Singh, a British national and operator of the Silk Road, had pleaded guilty to US authorities after being extradited from London last year.
It is worth noting that this case also involves the largest Bitcoin seizure operation in the history of the DEA, with a total of nearly 8,100 Bitcoins, valued at approximately $349 million at the current market price.
The largest Bitcoin seizure case in the history of the DEA
According to the official announcement by the US Department of Justice, 40-year-old Banmeet Singh was arrested in London in April 2019. Between 2012 and 2017, Singh operated eight drug distribution centers. After receiving drugs from overseas, he repackaged them and sold them to users in various states in the United States through dark web markets such as Silk Road, Alpha Bay, Hansa, and Dream Market, selling a large amount of drugs prohibited by the authorities.
On the users’ side, they paid for the drugs using encrypted currencies such as Bitcoin, MoneyGram, PayPal, and cash. Among the encrypted currencies confiscated by the DEA, there were approximately 8,100 Bitcoins, valued at only about $150 million at the time of seizure, but the current market value has doubled to $349 million.
The US government is one of the largest Bitcoin whales in the world, second only to Satoshi Nakamoto and Binance
According to the data from the cryptocurrency intelligence platform Arkham, the US government is currently one of the largest Bitcoin whales in the world, with a holding of 216,400 Bitcoins, with a total value of $9.4 billion, which may rise again due to this seizure.
According to the ranking data from bitinfocharts, the current holding of the US government is second only to the 1.1 million Bitcoins in Satoshi Nakamoto’s address (approximately 110,000 addresses holding approximately 1.1 million BTC, but have not been used for a long time) and the 248,600 Bitcoins in the cold wallet of Binance marked as an exchange (but should belong to customers).
Where does such a large amount of Bitcoins come from? According to the on-chain data tool Dune, in the period from November 2020 to January 2022, in three different operations, the US government seized over 200,000 Bitcoins from cybercriminals and the dark web market. Currently, these BTC are mainly stored in encrypted, password-protected offline cold wallets controlled by the US Department of Justice, the Internal Revenue Service, or other institutions.
The specific source details are as follows:
November 2020: Seizure of the largest dark web black market Silk Road – 69,369 BTC, current value exceeds $3 billion.
January 2022: Seizure from the Bitfinex hacker – 94,643 BTC, current value exceeds $4 billion.
March 2022: Seizure from Silk Road hacker James Zhong – 51,326 BTC, the US government still holds this portion of 41.5K BTC.
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How will the US government’s holding of over 200,000 Bitcoins affect the Bitcoin market in the next move?