US Department of Justice Approved to Liquidate $6.5B in Bitcoin Seized from Silk Road

This decision marks the culmination of a contentious legal battle and raises questions about the implications for the cryptocurrency market.

The U.S. Justice Department has received federal approval to sell the remaining Bitcoin (BTC) that was seized from the now-defunct darknet marketplace Silk Road. This decision comes after a lengthy legal battle over the ownership of the cryptocurrency.

According to a report by DB News on December 30, a federal judge ruled that the DOJ can proceed with liquidating the seized BTC, putting an end to a protracted dispute. The legal battle centered around Battle Born Investments, which asserted ownership of the Bitcoin through a bankruptcy estate connected to an individual accused of misappropriating Silk Road funds and claimed to have lawful rights to it.

The company pursued its claim through multiple levels of the judicial system, including the U.S. Supreme Court, but its bid to claim the Bitcoin was ultimately dismissed by the courts. Battle Born’s attorney went on to criticize the DOJ’s handling of the matter, alleging procedural misconduct.

This development comes as the new administration prepares to take office. President-elect Donald Trump has previously spoken about establishing a “Strategic Bitcoin Reserve,” which would be akin to the Strategic Petroleum Reserve that is used to manage confiscated digital assets and help mitigate economic risks.

While this policy direction signals a shift in how seized cryptocurrencies might be handled in the future, it remains uncertain whether the current Bitcoin stash will be included in such a reserve or if the administration will follow through on the proposal.

The decision to liquidate such a significant volume of Bitcoin has also raised concerns about its potential effect on market prices. Historically, large sales of seized Bitcoin by government entities have been conducted in smaller batches to minimize market disruption.

However, Ki Young Ju, CEO of CryptoQuant, sought to reassure investors by noting that the $6.5 billion sale could be absorbed within a week, given the market’s capacity. “Last year, $379 billion entered the market based on realized cap — roughly $1 billion per day. The U.S. government selling $6.5 billion could be absorbed in just a week,” Ju stated on social media.

Bitcoin price retreats below six figures

Bitcoin price briefly crossed the six-figure mark on Jan. 7. Now, it’s trading at around $93,300, down 2% for the day from a price of $95,000 on Bitcoin Liquid Index (BLX) at the time of writing. After falling below $90,000 on Jan. 4, BTC’s price recovered quickly.

حالیہ طور پر منسوخ کردہ تکنیکی تجزیہ میں، پچھلے ہفتے کی قیمت کارکردگی کے تناظر میں مزید بینچ مارک قائم کیے گئے تھے۔ تجزیہ کاروں کا مشاہدہ ہے کہ اگر قیمت میں مزید کمی آتی ہے تو پانک سیلنگ ہو سکتی ہے، جس سے اسے اس قیمتوں کی حد کے نچلے حصے کی طرف دھکیل دیا جائے گا جس میں اس نے سال کے آغاز سے ہی مضبوطی سے تجارت کی ہے۔

بوتوم لائن

The DOJ approval to sell the Silk Road Bitcoin also highlights the evolving intersection of cryptocurrency and law enforcement in the United States. This development comes as the new administration prepares to take office.

This development underscores the challenges of managing seized digital assets in a volatile market, especially considering the scale of this particular Bitcoin stash and the attention it has garnered from investors, policymakers, and industry stakeholders alike.

While the market appears resilient to the news, the potential sale — or retention — of these assets will likely remain a focal point for investors, policymakers, and industry stakeholders, shaping discussions on regulatory strategies and market stability in the coming months.