Most cryptocurrency enthusiasts will recall how the US Justice Department seized over 144,000 BTC during the Silk Road shutdown. Said bitcoins have always belonged to Ross Ulbricht, who argued the money didn’t belong to the DOJ in the first place. Unfortunately, his appeal was rejected, effectively netting the government institution a US$48 million payday. It’s another major plot twist in the world of Bitcoin and Silk Road, albeit not a positive one.
Silk Road Auction Proceeds Effectively Belong to the DOJ
As most people will remember, the bitcoins seized at the time of Russ Ulbricht’s arrest were sold during two separate auctions. The first auction took place in 2014, with the second one completing in 2015. All 144.336 bitcoins seized from Ulbricht and the Silk Road platform were sold to the highest bidder and netted a US$48 million paycheck for the US government at the time. At today’s prices, said coins are worth over US$620 million, which is a rather large increase.
However, this sale of coins was not to the liking of Ross Ulbricht, for obvious reasons. He challenged the legality of this forfeiture in court. While it appeared he had a fighting chance to see this seizure deemed illegal, things never got to that point. Instead, Ulbricht agreed to drop charges, although no one knows exactly why. The end result is the same as it would have been otherwise, though, as the US government can claim the US$48 million raised during these auctions.
Rest assured the Justice Department will not be too pleased about having sold all of these coins at an average price of US$334. Had it waited a few years longer, it would have received a lot more money for this currency they are still actively attempting to discredit. All of this goes to show Bitcoin is not a fad and the interest in owning this cryptocurrency is more than warranted. Even such a large sell-off didn’t collapse the Bitcoin price back then, nor would it have any major effects today.
For the time being, it remains unclear how these proceeds will be used once they are officially claimed. It is possible some of the law enforcement agencies involved will get some extra funding, even though two corrupt US officials were identified during the Ross Ulbricht case. Somehow, they received a lenient punishment compared to Ulbricht’s life in jail without parole. That verdict still doesn’t sit well with most of the Bitcoin community, as they feel Ross was made a scapegoat without enough substantial evidence to warrant this punishment.
The decision by Ulbricht to challenge ownership of this money was quite an interesting one. His defense lawyers felt the involvement of two corrupt agents from the DEA and Secret Service had “tainted” the money being seized. While neither of these corrupt agents altered the case in any significant manner – according to the prosecution, at least – they did put the ownership of the sold bitcoins into question. Ulbricht’s attempt eventually was retracted, which will continue to be considered a rather controversial outcome.
This is yet another chapter in the long story of Silk Road, Ross Ulbricht, and the US government. Despite chat logs confirming Ulbricht is Dread Pirate Roberts, not everyone is convinced they are one and the same person. There is still a possibility Ulbricht was framed for actions taken by someone else. Whether or not we will ever know the real truth behind Silk Road remains highly doubtful.