The U.S. Department of Justice (DOJ) has received authorization to sell 69,370 bitcoins seized from the infamous Silk Road dark web marketplace, a DOJ official confirmed on January 9. At current market prices, the bitcoin holdings are valued at approximately $6.5 billion.
The DOJ cited Bitcoin's price volatility as the key reason for seeking permission to liquidate these assets. Following the announcement, Bitcoin's price dropped over 2.5% in 24 hours to $94,400.
These bitcoins were originally seized during the 2013 shutdown of Silk Road, an illegal marketplace that operated on the dark web from 2011 until its founder Ross Ulbricht's arrest. The platform facilitated anonymous trades of drugs, fake documents, and hacking tools using Bitcoin as the payment method.
This won't be the first major Bitcoin sale by U.S. authorities. Since 2014, the government has conducted several auctions of Silk Road-seized bitcoins. The U.S. Marshals Service held its first auction of 30,000 bitcoins in June 2014, with prominent investor Tim Draper emerging as a major winner. Subsequent auctions in December 2014 and March 2015 each involved approximately 50,000 bitcoins.
Historical data shows these past government auctions had limited long-term impact on Bitcoin's market price. The sales were typically conducted through over-the-counter auctions rather than open market sales.
The timing of the planned sale has sparked speculation, particularly given former President Trump's campaign promises regarding Silk Road's founder. During his 2024 presidential campaign, Trump pledged to commute Ulbricht's sentence if re-elected. According to prediction markets, there's a 22% probability the government will sell the bitcoin before Trump potentially takes office.
The U.S. government currently holds 207,189 bitcoins in total, worth approximately $19.5 billion at current prices, representing nearly 1% of all bitcoin in circulation.
A DOJ spokesperson indicated that "The government will take further action based on the ruling in this case," but provided no specific timeline for the planned sale.