The US Department of Justice announced in 2020 that it had seized 69,370 bitcoins and other cryptocurrencies related to the dark web marketplace “Silk Road,” seeking to confiscate these assets and deposit them into the US Treasury. After several years, the US Court of Appeals finally issued an order on Wednesday officially approving the seizure of these encrypted assets.
Silk Road, which was established in 2011, was the first modern dark web marketplace, filled with illegal transactions including the sale of firearms, drugs, and passport information. It operated for two years and had a total bitcoin transaction volume of up to 9.5 million bitcoins. In 2013, Silk Road was discovered and shut down by US law enforcement agencies.
In 2020, the US Department of Justice announced that it had seized 69,370 bitcoins and other cryptocurrencies from the hacker address of “Individual X” who had hacked into Silk Road, with a value of over $1 billion at the time. The US Department of Justice sought to formally confiscate these assets, which are now valued at over $3 billion. After years of litigation, the US Ninth Circuit Court of Appeals finally issued an order on Wednesday approving the initial ruling made in August of this year, formally confiscating the aforementioned 69,370 bitcoins and other cryptocurrencies related to the dark web marketplace Silk Road. The order listed Silk Road founder Ross Ulbricht as the defendant, with two claimants and the US government as the plaintiffs.
The management of the aforementioned 69,370 bitcoins by the US government has attracted close attention. The market believes that if the US government sells these bitcoins on a large scale, it may affect the price of bitcoin.
In 2021, the US Department of Justice announced that it had discovered approximately 50,676 bitcoins from another hacker, James Zhong, who had stolen assets from Silk Road. These assets have been sold since March. At that time, the US Department of Justice stated that the remaining bitcoins would be sold in batches within a year, representing the proceeds of the Silk Road case that the US authorities may have reached a consensus on.
Silk Road founder Ross Ulbricht accumulated a fortune of $1.2 billion during the two years of Silk Road’s operation. However, he was arrested in October 2013 and sentenced to life imprisonment without parole in 2015. He was also ordered to pay $183 million in restitution.
In 2021, Ross Ulbricht reached an agreement with the prosecutor, giving up any rights to the 69,370 bitcoins and other cryptocurrencies seized by the US authorities and agreeing to transfer these assets to the US government for auction to offset his $183 million debt to the US government.