- The United States has initiated the sale of over $130 million in bitcoin linked to Silk Road forfeitures, sparking concerns about a potential price collapse
- Two lots of Silk Road-connected bitcoin, one associated with former Secret Service agent Shaun Bridges, are set for auction
- Despite concerns about the impact on Bitcoin’s price, the sale’s magnitude is relatively small compared to the significant selling activity by Grayscale since the launch of a Bitcoin ETF
The United States has initiated the process of selling over $130 million worth of bitcoin associated with Silk Road forfeitures, leading to concerns over a price collapse. The public notification outlined that two lots of bitcoin connected to the former drugs market will be auctioned off, with one lot connected to Shaun Bridges, a former Secret Service agent who stole bitcoin from Silk Road while investigating it. The sale of the government’s Silk Road bitcoin has been a source of concern for some in terms of Bitcoin’s price, but the figure is a drop in the ocean compared to how much Grayscale has been selling since the launch of a Bitcoin ETF.
Silk Road Still Impacting Bitcoin Ten Years On
Silk Road was shuttered in 2013 when its founder and operator, Ross Ulbricht, was arrested with his laptop logged into the backend of the site. Bridges was convicted of using the log-in credentials of a Silk Road informant to repeatedly steal bitcoin from the site, resulting in two separate prison sentences being handed down to him, one in 2015 and one in 2017. Another member of the same task force, Carl Force, was also found guilty of stealing bitcoin from the site among other crimes; in 2015 he was sentenced to six years in prison.
Of the 2,800 bitcoin being auctioned, only 58 is that stolen by Bridges, with the vast majority belonging to a Silk Road seller and his father: Xanax seller Ryan Farace, who was last year sentenced to 54 months in prison for money laundering conspiracy, and his father, Joseph, who was sentenced two weeks ago for helping his son launder the funds.
Nothing to Worry About
The knowledge that $130 million worth of bitcoin is to be auctioned off has some worried for Bitcoin’s price, but these concerns are invalid: the auction is in effect a private sale that won’t affect order books and the amount of bitcoin being sold is dwarfed by the selling that Grayscale has been doing since its Bitcoin ETF was approved, with the firm having shed hundreds of thousands of coins in order to realize profits for its holders.