Bitcoin once again demonstrated its resilience in the face of adversity as it closed the week strong, despite a massive dump of seized BTC by US authorities.
In a March 31 court filing with the US District Court for the Southern District of New York case against James Zhong, it was revealed that the government has begun selling the 51,352 Bitcoin forfeited in the Ulbricht case. As per the document, the government sold roughly 9,861 of the stash for just over $215 million on March 14, 2023.
US to liquidate Silk Road Bitcoin
The filing further revealed that the government planned on liquidating the remaining 41,490 BTC in four separate sales before 2023 ends.
“The Government understands [that the Bitcoin] is expected to be liquidated in four more batches over the course of this calendar year,” read the filing.
Based on the price of Bitcoin at press time, a single sale of the said bitcoin would generate roughly $1.2 Billion for the US government.
Zhong pleaded guilty to wire fraud in November 2021 for conspiring to steal Bitcoin from Silk Road after the Department of justice confiscated over 50,000 BTC from him, making it the second-largest seizure ever at the time. However, he entered a plea deal that would see him cooperate with law enforcement to reduce his sentence.
Silk Road was an online “darknet” black market used by many drug dealers and other unlawful vendors to distribute massive quantities of illegal drugs and other illicit goods and services. Bitcoin was the only form of payment accepted on the Silk Road. The website was created by Ross Ulbricht in 2012, a convict who is already serving a sentence for his role in enabling illegal sales through his website.
Markets Barely Shaken By The BTC Sale
Meanwhile, despite the news spooking traders, Bitcoin remained resilient after the news, consolidating sideways tightly after tapping $29,000 on Thursday.
That said, the flagship cryptocurrency is, however, likely to face some selling pressure considering plans by the US government to sell the remaining 41,490 BTC.
It is also important to note that the Mt.Gox repayments are expected to be made later this year, potentially unlocking 142,000 BTC into the market. Nevertheless, in February, sources said that Mt. Gox’s top creditors mainly chose to receive their bankruptcy recovery in bitcoin, easing fears of a potential price drop. If they had chosen fiat currency, the bankruptcy trustee would have had to sell a significant portion of Mt. Gox’s bitcoin holdings.
At press time on Sunday, BTC was exchanging hands at $28,086, down 1.50% in the past 24 hours.