- The sale of $6.5 billion worth of Silk Road bitcoins will go ahead following a final judgment
- Judge Richard Seeborg denied a motion to block the forfeiture of the 69,370 bitcoins
- The ruling, made on 30 December, may explain Bitcoin’s $10,000 drop
The reason for Bitcoin’s $10,000 drop may have become clear: the US government has been given the go-ahead to liquidate $6.5 billion in bitcoins related to Silk Road. On 30 December, Chief US District Judge Richard Seeborg denied a motion to block the forfeiture of 69,370 bitcoins, clearing the path for the Department of Justice to sell the haul. Investment company Battle Born Investments had been fighting the sale, claiming that it owned the rights to the coins, but this was ultimately dismissed by Judge Seeborg, and the US Marshals will now handle the sale.
Battle Born Loses the Fight
The story of Battle Born Investments and the Silk Road Bitcoin case is tied to one of the largest cryptocurrency seizures in history. After the FBI shut down Silk Road in 2013 and arrested its creator, Ross Ulbricht, they seized significant amounts of bitcoins tied to the darknet marketplace.
In 2014, Battle Born Investments purchased bankruptcy claims related to Silk Road, asserting rights to certain assets, including bitcoins. This became more significant in 2020 when the US government seized the 69,370 bitcoins from “Individual X,” who had stolen them from Silk Road and later returned them.
Battle Born filed a lawsuit in 2022, claiming ownership of the seized bitcoins. However, the US District Court and later the Ninth Circuit Court of Appeals ruled against the company, affirming the government’s control over the assets. In October 2024, the Supreme Court declined to hear Battle Born’s appeal, and it seems that Battle Born made one last attempt to halt the sale, an attempt that was dispatched by Judge Seeborg last year.
Don’t Panic
The US Marshals service will now conduct the sale, likely through Coinbase, its chosen partner in such ventures, which could be behind Bitcoin’s $10,000 drop this week. However, as Cryptoquant founder and CEO Ki Young Ju pointed out, this is nothing to worry about:
Last year, $379B entered the market based on realized cap—roughly $1B per day.
The U.S. govt selling $6.5B could be absorbed in just a week.
Do not panic. https://t.co/MTCTKmM5uZ
— Ki Young Ju (@ki_young_ju) January 9, 2025
Traders don’t seem to have heeded Ki’s suggestion, however, leading to Bitcoin’s drop to $92,000 (so far).
