Crypto X Buzzes Over the Silk Road Bitcoins Dump

The US government approved the sale of 69,370 BTC seized from the Silk Road market less than two weeks before Trump’s inauguration. How was this possible? Will the sale actually happen? How does society react to this news?

The Northern District Court of California approved the liquidation of bitcoins seized from the Silk Road market in November 2020, years after the black market was shut down. The decision ends the four-year legal fight over the future of the seized cryptocurrency.

How was approval possible?

One of the most significant twists in the legal battle occurred on December 30, 2024, when Chief U.S. District Judge Richard Seeborg denied a motion to block the seizure of seized Bitcoins. The move made it possible for the Department of Justice to liquidate bitcoin associated with the Silk Road.

Does this mean bitcoins are about to be sold? No. Possible objections and a series of administrative steps lie ahead, so it’s hard to say exactly when the sale could happen.

Although the Silk Road black market was closed in 2013, the black market’s wallet was hacked. The person who owned over 69.3 thousand Bitcoins associated with the market did not agree to leave these funds to the government until 2020.

One of the organizations fighting to acquire these bitcoins was the company Battle Born Investments, but in October 2024, the US Supreme Court refused to take up the case, paving the way for the approval of the sale, which made headlines on January 9, 2024.

Political subtext

At the Nashville Bitcoin conference last year, Donald Trump promised that the United States would never sell bitcoin. If elected, he said the administration would “hold 100% of all Bitcoins that the U.S. government currently holds or will acquire in the future.” Trump promised that America would create a bitcoin stockpile and become the crypto capital of the world.

The potential sale of seized bitcoins contrasts sharply with the intentions of the president-elect and the incoming administration. Some see this as a deliberate undermining of Trump’s policy by current officials, as their days will likely soon be over, similar to Trump pardoning Joe Biden’s son Hunter following his election victory.

Another possible reason is that the current administration does not see Bitcoin as a valuable asset and is in a rush to abandon it before the bear market begins. As of January 9, 2024, the total of 69,370 BTC is worth approximately $6.55 billion.

Opinions

Immediately following the court approval of the seized bitcoins, Crypto X found itself busy reacting harshly to the news. People, including CEOs of various fintech companies, were pleasantly condemning the move, constantly saying that if the Justice Department sold these bitcoins, Trump would buy even more, possibly doubling that sum.

However, some speakers continued to offer deeper insights into the news. For example, David Bailey, CEO of Bitcoin Magazine, stated that the sale of captured bitcoins intended to be part of the strategic Bitcoin reserve would be seen as a “middle finger to the voters” as the sale would legally go against their priorities. He was elected president.

The flip side is that if the DOJ thinks they can steal America’s Bitcoin reserves and reject the US President’s policy priorities to line their own department’s pockets, the DOJ has made sure we get the SBR… there’s news for them.

What a middle finger to the voters https://t.co/PgNRSnQ708

— David Bailey🇵🇷 0.85 mm/btc dollar (@DavidFBailey) January 9, 2025

Bailey noted that the Justice Department could view the possible sale as a way to increase the department’s budget. The Justice Department probably doesn’t want to give the new administration $6.55 billion and is rushing to cash out the money.

Custodia Bank CEO and avid Operation Choke Point 2.0 critic Caitlin Long went further, raising the question about the possibility of government insiders purchasing bitcoins for themselves after driving the price down by selling seized bitcoins during the crash.

They don’t see it that way. They look like they’re thinking #bitcoin It’s going to zero, and they want to help it go to zero by hitting the markets during downturns. (Can you call it market manipulation???) If the government does this, it is legal. I wonder how many government officials will personally buy into this decline?

— Caitlin Long 🔑⚡️🟠 (@CaitlinLong_) January 9, 2025

Caitlin implies that this could be seen as market manipulation, adding that “if the government does this, it’s legal.”

Author, entrepreneur, and former Senate candidate and CryptoLawUS founder John E Deaton said in his

While some headlines read things like “crypto community on edge” over possible selloff, at the end of the day, those 69.3k Bitcoins are far from a significant share of the amount Trump or Senator Lummis want the US to hold.