The US plans to sell about $130 million worth of Bitcoin collected in the Silk Road dark web case.
Silk Road is a digital ‘black market’ operating since 2011, which allows users anonymous access to conduct illegal transactions such as selling drugs, weapons, toxins, or money laundering in Bitcoins. The website closed in 2013 and Silk Road’s assets were confiscated by the US government.
The auction includes two lots of Bitcoin. The first lot contained 2,874.9 Bitcoins and the second lot contained 58.7 Bitcoins. The amount of Bitcoin about to be sold accounts for only 1.5% of the total Bitcoin held by the US government, estimated at 194,188 Bitcoin. This number is still less than 1% of Bitcoin’s circulating supply.
According to CoinTelegraph, the first lot belongs to Ryan Farace – a former drug seller on Silk Road, and his 72-year-old father – Joseph Farace. When convicted in 2018, Ryan Farace claimed he lost access to the wallet containing the Bitcoin earned from Silk Road transactions. After that, Ryan Farace and his father’s plot to disperse 2,874 Bitcoins to foreign bank accounts was discovered. In early January 2024, both were convicted of money laundering conspiracy.
The remaining amount of Bitcoin is related to former US secret agent Shaun Bridges, who was in the task force searching for the person behind Silk Road. During the investigation, Bridges transferred $800,000 worth of Bitcoin to his account. In 2015, he was sentenced to 6 years in prison for Bitcoin theft. Bridges admitted to using private keys to access the US government’s digital wallet and then transferring Bitcoin to his other wallets.
According to CNBC, the US government sold 500 Bitcoins to Riot Blockchain company for 5 million USD in 2018. Previously, billionaire Tim Draper spent 18.7 million USD to buy 29,656 Bitcoins in an auction 2014. The Bitcoin that Draper bought is currently worth more than $1 billion.