A US court has authorized the sale of $6.5 billion in Bitcoin that was seized from the infamous Silk Road marketplace, resolving a lengthy legal battle that has lasted four years.
Hurdles Dismissed for Bitcoin Liquidation
The Northern District Court of California ruled that the Department of Justice (DOJ) could liquidate 69,370 Bitcoins after Chief US District Judge Richard Seeborg dismissed efforts to block the government from selling digital assets.
Sponsored
While the ruling clears the way for the sale, the liquidation process will not be immediate due to the necessary administrative procedures. This decision follows earlier reports indicating that the U.S. government had been preparing to offload the seized cryptocurrency.
In recent months, portions of the seized Bitcoin have already been sold. On December 3, 2024, the US government moved nearly $2 billion worth of Silk Road-related Bitcoin to Coinbase, further hinting at the government’s intent to divest from its holdings.
Silk Road Bitcoin Seizure
The Silk Road, an online black market that operated between 2011 and 2013, was dismantled by U.S. authorities in 2013. During the shutdown, the government seized approximately 144,000 Bitcoins tied to illegal activities.
In 2021, a significant seizure of 69,370 Bitcoin, valued at $6.5 billion at the time, was recovered from a Silk Road-related wallet, marking one of the largest Bitcoin seizures in history.
However, the liquidation process has been delayed due to legal procedures.
Market Awaits Final Mt. Gox Repayments
The impact of such massive Bitcoin seizures is evident in the market. A similar situation occurred with the defunct Mt. Gox, a once-dominant Bitcoin exchange.
Mt. Gox, which handled 70% of global Bitcoin transactions at its peak in 2014, filed for bankruptcy after hackers stole 850,000 Bitcoin. One of the biggest hacks ever triggered a sharp drop in Bitcoin’s price from $1,000 to $200.
In 2019, a portion of Mt. Gox’s remaining Bitcoin was found, leading to a civil rehabilitation process to compensate victims. As of last October, 97,000 of the 142,000 Bitcoin have been distributed, with 45,000 repayments pending, set for completion by October 2025.
Why This Matters
The ongoing distribution process is expected to affect the market, as the release of Bitcoin could increase supply and exert downward price pressure if creditors choose to sell.
Check out DailyCoin’s trending crypto news:
Crypto Market Drops Down: $695M Liquidated in 24 Hours
Bitfinex Expands into Latin America with El Salvador DASP License
