Author: Weilin, PANews

On January 9, according to DB News, the U.S. Department of Justice has been authorized to sell $6.5 billion worth of Bitcoin seized from the Silk Road dark web marketplace. Following the news, the price of Bitcoin dropped from $950,000 to below $940,000, and as of January 9 at 1:05 PM, it rebounded to $94,258, down 1.93% for the day.

Notably, this news broke less than two weeks after Trump’s new administration officially took office, and Trump had vowed at last year's Bitcoin conference not to allow the U.S. government to sell any Bitcoin, promising to classify Bitcoin as a strategic reserve asset for the United States.

However, according to analysis from on-chain monitoring platforms, it is expected that the U.S. government will need several months to begin liquidating the Bitcoin seized from Silk Road, and analysts generally believe that the selling pressure will be quickly absorbed by the market.

Department of Justice Authorized to Liquidate Bitcoin Seized from Silk Road

On October 7 last year, the U.S. Supreme Court declined to hear the case of Battle Born Investments regarding the ownership of 69,370 BTC (approximately $4.33 billion) seized from Silk Road, thereby allowing the government full control over the seized funds. The court's decision likely paves the way for the U.S. government to sell these Bitcoins. At that time, the valuation of these Bitcoins was $4.4 billion. The U.S. Marshals Service is expected to manage the liquidation process. Once confirmed, this will become one of the largest seized cryptocurrency sales in history.

According to DB News, here are the key points of the event:

• Official confirmation that a U.S. federal judge ruled on December 30, 2024, that the U.S. Department of Justice (DOJ) can sell 69,370 Bitcoins seized from the Silk Road dark web marketplace.

• The long-standing dispute over the ownership of these seized Bitcoins has ended, and Battle Born Investments failed to delay the sale. The company claimed to own these Bitcoins through a bankruptcy estate and lost a Freedom of Information Act (FOIA) lawsuit that failed to reveal the identity of "Mr. X," who originally surrendered the Bitcoins.

• Lawyers for Battle Born called this a "further example of the DOJ's abuse of civil asset forfeiture procedures," accusing the government of "relying on procedural tricks to ensure that the truth can never be made public."

• The DOJ pushed for permission to sell these assets citing Bitcoin price volatility. When asked about the next steps, a DOJ spokesperson stated, "The government will continue to move forward based on the court's ruling in this case."

• The seized Bitcoins are currently valued at approximately $6.5 billion.

The court's ruling effectively upheld a decision made by the U.S. District Court for the Northern District of California in 2022, ordering the government to liquidate these Bitcoins under current law. The case was brought by Battle Born Investments, which argued that it had rights to the Bitcoins through a bankruptcy estate related to Silk Road. Battle Born claimed that these Bitcoins were stolen by an individual known as "Individual X," who allegedly took the funds from Silk Road.

Less than Two Weeks into Trump's Administration, His Crypto Promises Face Embarrassment

Dramatically, this comes less than two weeks after the new Trump administration officially took office, during which Trump had vowed not to sell any Bitcoin.

As early as last July, when Trump attended the Bitcoin conference, he stated that he would seek to reduce the sentence of Silk Road founder Ross Ulbricht. Ulbricht was sentenced to life in prison for operating the Silk Road marketplace, where customers used virtual currency to purchase illegal drugs and hacking tools.

At last year's Bitcoin conference, Trump vowed that if he returned to the White House, he would ensure the government retained 100% of its Bitcoin holdings and would classify Bitcoin as a strategic reserve asset for the United States. "For too long, our government has been violating a fundamental rule that every Bitcoin player remembers: never sell your Bitcoin," Trump said during his keynote speech at the Bitcoin conference in Nashville.

Silk Road was the first modern dark web marketplace. Founded in 2011 by its American creator Ross Ulbricht under the pseudonym "Dread Pirate Roberts," the marketplace operated as a hidden service through the Tor network, allowing users to anonymously buy and sell goods and services. All transactions were conducted using Bitcoin. The site was known for its illegal drug trading market, as well as other illegal and legal goods. From February 2011 to July 2013, Silk Road facilitated approximately 95,200 Bitcoins in transactions.

In October 2013, the FBI shut down the Silk Road website and arrested Ulbricht. In November of the same year, Silk Road 2.0 was launched, operated by other administrators of the original site, but was shut down again the following year due to "Operation Onymous." In 2015, Ross Ulbricht was convicted in federal court on multiple charges related to operating Silk Road and was sentenced to two life terms without the possibility of parole.

Industry Executives: Urging Not to Panic, Buying Opportunity May Be Here

On January 9, on-chain analyst Trader T stated on the X platform that it may take several months from the approval to the actual sale of the "69,370 BTC seized from the dark web Silk Road" by the U.S. government.

Additionally, Spot On Chain indicated that the U.S. government currently holds approximately 197,000 BTC, and previous sales were conducted through over-the-counter transactions, which did not directly impact prices but may have caused market panic leading to a temporary price drop.

HODL15Capital mentioned in their analysis that they have confirmed on-chain that the BTC held by the U.S. has not been transferred or sold.

CryptoQuant CEO Ki Young Ju posted on X, stating, "Based on actual market value, the funds that entered the market last year amounted to $379 billion, about $1 billion per day. The $6.5 billion sold by the U.S. government can be absorbed in just a week. Don't panic."

On January 9, regarding the "U.S. Department of Justice approved to sell $6.5 billion in seized Silk Road Bitcoin," BitMEX co-founder Arthur Hayes posted on the X platform, stating that diamond hands are ready to buy the dip.

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