The U.S. government approved the sale of 69,370 BTC seized from the Silk Road marketplace less than two weeks before Trump’s inauguration. How did it become possible? Will the sale actually take place? How does the community react to the news?
The Northern District Court of California approved the liquidation of the bitcoins seized from the Silk Road marketplace in November 2020, years after the black market shut down. The decision concludes the four-year-long legal battle over the future of the seized crypto.
How did the approval become possible?
One of the key shifts in the legal battle took place on Dec. 30, 2024, when Chief U.S. District Judge Richard Seeborg denied a motion to block the forfeiture of the seized bitcoins. The move made it possible for the Department of Justice to liquidate the bitcoin associated with Silk Road.
Does it mean that the bitcoins are about to be sold? No. The possible appeal and a series of administrative steps are in the way, so it’s hard to say when exactly the sale can take place if it happens at all.
Although the Silk Road black market was shut down back in 2013. The black market’s wallet was hacked. It was not until 2020 that the person holding over 69.3k bitcoins associated with the marketplace agreed to release these funds to the government.
One of the entities fighting to get these bitcoins was the Battle Born Investments company, however, in October 2024 the U.S. Supreme Court declined to take on a case, paving the way for the sale approval that made headlines on Jan. 9, 2024.
The political subtext
Last year, during the Nashville Bitcoin conference, Donald Trump promised that the USA would never sell bitcoins. He said that if he gets elected, the administration will “keep 100% of all the bitcoin the U.S. government currently holds or acquires into the future.” Trump promised that America will create a stockpile of bitcoins and become the crypto capital of the world.
The potential sale of the seized bitcoins sharply contradicts the intentions of the President-elect and the upcoming administration. Some see it as an intentional undermining of Trump’s policy by the current officials as their days will probably soon be gone, similar to Joe Biden pardoning his son Hunter following Trump’s victory in the election.
Another possible reason is that the current administration doesn’t see Bitcoin as a valuable asset and is in a hurry to dump it before the bear market starts. As of Jan. 9, 2024, the sum of 69,370 BTC is valued at around $6.55 billion.
Opinions
Right after the approval of the seized bitcoins by the court, crypto X found itself busy posting strong reactions to the news. People, including the CEOs of various fintech companies, were anathematizing the move delightfully, repeatedly saying that if the DOJ sells these bitcoins, Trump will buy even more and probably double that sum.
However, some speakers went on to offer deeper insights into the news. For instance, the Bitcoin Magazine CEO David Bailey noted that the sale of the seized bitcoins meant to be part of the strategic Bitcoin reserve would have been seen as a “middle finger to the voters” as the sale would go against the priorities of the lawfully elected President.
https://twitter.com/DavidFBailey/status/1877184262580892086
Bailey noted that the DOJ might see the possible sale as a way to boost the department’s budget. The DOJ probably doesn’t want to hand $6.55 billion to the new administration and rushes to cash it out.
The Custodia Bank CEO and the avid Operation Choke Point 2.0 critic Caitlin Long went further, raising the question about the possibility that the government insiders will buy bitcoins for themselves after crashing the price via selling the seizing bitcoins during the dip.
https://twitter.com/CaitlinLong_/status/1877186957299556736
Caitlin hints it can be regarded as market manipulation, adding that “it’s legal if the government does it.”
The author, entrepreneur, and former Senate candidate and the CryptoLawUS founder John E Deaton said in the X post that the move will only make the SBR creation faster as Trump and David Sacks will see the sale approval as outright sabotage.
While some headlines read something like “the crypto community is on edge” because of the possible sale, at the end of the day, these 69.3k bitcoins are far from being a substantial share of what Trump or Senator Lummis wants the U.S. to hold.
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