According to a court document filed on March 31, 2023, regarding the sentencing of James Zhong, who stole over 50,000 bitcoin from the Silk Road marketplace, the U.S. government plans to liquidate 41,490 bitcoin “over the course of this calendar year.”
U.S. Government Discloses Strategy for Selling Confiscated Bitcoin
The U.S. government, one of the largest holders of bitcoin, plans to sell 41,490 BTC in 2023, according to a court filing submitted in the case of James Zhong’s sentencing. The government made the historic bitcoin seizure in November 2022 when it confiscated over 50,000 BTC from Zhong. The defendant pleaded guilty “to committing wire fraud in September 2012 when he unlawfully obtained over 50,000 bitcoin from the Silk Road dark web internet marketplace.”
Bitcoin.com News reported six days ago that, according to Dune Analytics data and public disclosures, the U.S. government holds 205,515 BTC. In the filing submitted on Friday, federal authorities plan to sell at least 41,490 BTC worth $1.17 billion at today’s exchange rates.
The court document notes, “With respect to the 51,351.89785803 bitcoin forfeited in the Ulbricht case before Judge Schofield, the government has begun liquidating (selling) it. On March 14, 2023, the government sold 9,861.1707894 BTC (of the 51,351.89785803 BTC) for a total of $215,738,154.98.”
According to onchain analytics firm Glassnode, the sale of 9,861 BTC was detected, or at least the period of time when it was sent to a major exchange prior to selling. “Of the bitcoin forfeited in the Ulbricht case, there remains approximately 41,490.72 BTC, which the government expects to be liquidated in four more batches over the course of this calendar year,” the filing adds.
Glassnode’s account of the onchain transfer explains that the funds were likely sent to Coinbase. If the funds were sold on Coinbase, it would be different from the U.S. government’s previous auction style of selling seized crypto assets. When the government sells the 41,490 BTC, it will still have 164,025 BTC, or $4.65 billion worth, remaining.
What do you think of the U.S. government’s decision to liquidate its seized bitcoin? Share your thoughts in the comments section below.