U.S. Government Plans to Auction $117 Million in Seized Bitcoin
The U.S. government has announced its intention to auction approximately $117 million worth of Bitcoin that was confiscated during a dark web drug bust. The auction will include nearly 2,875 BTC seized from Ryan Farace and Sean Bridges in 2021, as well as an additional 59 BTC belonging to Farace alone. At the time of the filing, the seized Bitcoins were valued at around $133 million.
DOJ Charged Farace in 2018 After Silk Road Bust
Ryan Farace was previously charged by the U.S. Department of Justice in 2018 for illegally selling Xanax on the dark web. Farace used the infamous dark web marketplace Silk Road to distribute drugs and receive payments in Bitcoin. He operated under the pseudonym Xanaxman. Farace and his father, Joseph Farace, were both sentenced to prison for money laundering conspiracy.
What is the Silk Road?
The Silk Road was a notorious online black market that operated from 2011 until it was shut down by the FBI in 2013. It was primarily known for selling illegal drugs but also offered other illicit goods and services. The use of Bitcoin for transactions on Silk Road brought attention to the cryptocurrency, although for illicit purposes. The founder of Silk Road, Ross Ulbricht, is currently serving a life sentence in jail.
U.S. Government Owns Over $5 Billion Bitcoin
The U.S. government has acquired approximately 200,000 Bitcoins (worth around $5 billion) through seizures related to criminal activities, making it one of the largest holders of Bitcoin. These digital assets are securely stored offline in encrypted hardware wallets controlled by federal agencies like the Department of Justice and the Internal Revenue Service (IRS). The government’s approach to these holdings is not driven by market speculation or timing but rather by the legal process of confiscation and management.
Hot Take: U.S. Government Auctions Seized Bitcoin from Silk Road
The U.S. government’s upcoming auction of seized Bitcoin from the Silk Road case highlights its continued efforts to combat illegal activities in the cryptocurrency space. By selling off confiscated assets, the government aims to deter criminals while potentially impacting the digital asset market. However, the government’s accumulation of Bitcoin is primarily a result of the legal process, rather than an active trading strategy. With over $5 billion worth of Bitcoin in its possession, the U.S. government holds significant influence over the crypto market as it navigates the complexities of managing these seized assets.
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