How many bitcoins does the US government have? When they sell coins

The US government owns almost $3 billion worth of bitcoins, and a significant part of it is somehow connected with the confiscation of coins in the case of the first illegal online marketplace

The US government on January 25 published an official notice informing of its intention to sell approximately $115 million worth of bitcoins confiscated during the investigation into the Silk Road online drug trafficking platform, which operated from 2011 to 2013..

US authorities said they plan to «dispose at the discretion of the Attorney General» of nearly 2,875 bitcoins seized from former special agent Sean Bridges and drug dealer Ryan Faras in 2021, as well as approximately 59 more bitcoins belonging only to Faras. According to the publication, anyone wishing to declare an “interest in the confiscated property” can do so within 60 days.

Bitcoin Silk Road

Silk Road was the first anonymous online marketplace for the trade of prohibited goods — from drugs to fake documents. The site used bitcoins for payments between sellers and buyers and was located in the dark segment of the Internet, accessed using the anonymous Tor network. During the operation of Silk Road, the turnover of drugs and other illegal goods through the platform reached $213 million at the Bitcoin exchange rate at the time of its operation (on average, about $20 per 1 BTC).

In October 2013, Silk Road was dismantled by operatives of the Federal Bureau of Investigation (FBI), the Drug Enforcement Agency (DEA) and the US Internal Revenue Service (IRS).. Silk Road founder Ross Ulbricht, also known as Dread Pirate Roberts, was arrested and charged with drug trafficking, money laundering and creating a criminal enterprise.. In February 2015 he was sentenced to life imprisonment.

How a young American became a drug lord and went broke in cybersecurity

During the investigation into the Silk Road case, authorities confiscated 174 thousand from Ulbricht.. of bitcoins. But these bitcoins subsequently became the subject of other legal proceedings..

Seized coins

The official notice indicates that the US Government plans to sell two lots of bitcoins confiscated during the Silk Road investigation. The first lot includes about 2800 BTC, valued at $129 million. The second, smaller lot includes 58 BTC, valued at approximately $3 million.

Both lots are associated with former special agent Sean Bridges and drug dealer Ryan Faras, who were convicted, among other things, of laundering bitcoins received on Silk Road, but were not directly connected to the site.

Sean Bridges was a US Secret Service agent who was part of a task force investigating illegal activities on Silk Road. During the investigation, when the site was still operating, he, under various pretexts, extorted money from Ulbricht to stop the investigation against him. In 2015, Bridges was arrested and sentenced to six years in prison.. He was released in December 2021.

Just before serving his sentence for the Silk Road Bitcoin crime, Bridges was charged with stealing approximately 1,600 BTC belonging to the US government.. He admitted to using access to a government wallet and transferring funds to other exchanges. In total, about 3,100 bitcoins worth about $10.4 million were seized from Bridges.

Ryan Faras, who sold drugs on several online platforms under the pseudonym Xanaxman, was arrested and sentenced to prison in 2018. According to a statement from the US Department of Justice, Faras received approximately 9,138 bitcoins through wallets associated with online marketplaces selling illegal items.. In the plea deal, Faras stated that he used Silk Road, among other things.

After the verdict, the US government confiscated only 24 bitcoins from Faras. He himself stated that he had lost access to other bitcoins associated with his crimes.. However, in 2020, while in prison, Faras contacted his father, gave him the key to the crypto wallet and asked him to sell more than 2,800 bitcoins. As a result, authorities seized more than 2,933 bitcoins from the Faras family, which are now valued at approximately $115 million.

Other episodes

In 2012, a hacker named James Zhong discovered a vulnerability in Silk Road's withdrawal processing system.. Before it was corrected, with its help Zhong stole more than 50 thousand from the site. bitcoins, which at that time was about $1 million.

Despite the close attention of law enforcement agencies to the details and persons involved in the Silk Road case, Zhong was able to hide his crime for ten years. According to a CNBC report, Zhong lived a luxurious lifestyle using stolen bitcoins. He bought expensive cars, houses, lived in luxury hotels and threw parties.

However, in 2019, Zhong made a mistake. He sent a small part of these bitcoins to the exchange, where he was verified with his real personal data. FBI agents, who had been monitoring Zhong for a long time, received a search warrant to search his home.

During a search of Zhong's home, a hardware wallet with stolen bitcoins and other valuables was found. The total value of the seized property was about $3.36 billion. This confiscation was the second largest in the history of the US Department of Justice.

In November 2022, Zhong pleaded guilty to fraud, hacking and robbery of the Silk Road marketplace and was sentenced to one year in prison.

Selling through auctions

In March 2023, the US Marshals Service (USMS) held a closed auction of James Zhong's confiscated bitcoins.. US authorities sold about 9,861 BTC out of a total amount of 50 thousand. bitcoins, earning more than $215 million. Only registered participants who had previously made a deposit of $200 thousand could participate in the auction.. with a minimum bet of $100 thousand.

The auction was divided into several lots of bitcoins, ranging from 100 to 1 thousand. coins. The government decided to sell only part of the confiscated bitcoins to avoid a negative impact on the cryptocurrency rate.

As of January 2024, US authorities still have about 41 thousand. bitcoins, one way or another related to the Silk Road case. At the current Bitcoin rate of $40 thousand. selling the remaining coins could bring in about $1.5 billion.

The US government owns a significant amount of Bitcoin. According to the analytical platform Arkham, as of January 25, 2024, its balance was 69.37 thousand BTC, worth about $2.758 billion.

The first official buyer of confiscated bitcoins is investor Tim Draper. In 2015, he managed to win the auction for the distribution of bitcoins from the first ever illegal online marketplace, Silk Road. Draper never said at what rate he received the coins. He is an open supporter of cryptocurrencies and predicts an increase in the rate of the first cryptocurrency to $250 thousand in 2024.