important point
- The US government has begun liquidating Bitcoin seized from Silk Road exploiter James Zong.
- DOJ already sold 9,861 BTC on March 14th for $215.5 million.
- The remaining 41,490 BTC will be sold in four installments within the year.
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Onchain analysts noticed earlier this month that the US government was moving funds seized from Silk Road exploiter James Zong. It turns out that the DOJ was plotting to sell part of the stash.
silk road bitcoin dumping
The US government is selling some of its bitcoin holdings.
New Application From U.S. Department of Justice indicates Some of the bitcoins seized by authorities from Silk Road exploiter James Zong have already been sold.
According to documents, the government at one time held a total of 51,351 BTC (worth about $1.4 billion at current prices) related to the Silk Road, most of which came from Zhong. Of those holdings, 9,861 BTC were sold on his March 14th, bringing DOJ past his $215.5 million. The application states that the government paid approximately $215,738 in fees for the transaction. The remaining 41,490 BTC ($1.1 billion) will be sold in four more installments later this year.
Zhong has been accused of defrauding darknet marketplace Silk Road in September 2012 by abusing the platform’s withdrawal mechanism. US authorities managed to seize Zhong’s stash of 50,676 BTC in November 2021. Zhong plead guilty To one count of wire fraud in November 2022. He faces up to 20 years in prison, but a court recently ruled to waive his prison sentence, citing his difficult childhood, autism, and the fact that his crimes were not the victim. I asked for Judgment will be handed down on April 14th.
Government likely used Coinbase to sell 9,861 BTC. On-Chain Analyst noticed Earlier in March, a wallet associated with seized Silk Road funds was found to have moved approximately 49,000 BTC to various new addresses. One of these addresses was identified as belonging to cryptocurrency exchange Coinbase. Received 9,825 BTC on March 7th.
DOJ’s use of Coinbase is unusual. Governments have historically preferred to liquidate confiscated digital assets through public auctions.
Disclosure: At the time of writing, the author of this work owned BTC, ETH, and several other crypto assets.