Bitcoin recovered from a wallet linked to a Silk Road hack in 2013 will be used to wipe out the debt owed to the U.S. Government by creator Ross Ulbricht.
Cover art/illustration via CryptoSlate
In a recent development, roughly $2.7 billion in Bitcoin (BTC) was recovered from a wallet linked to a Silk Road hack in 2013 and will be used to wipe out the debt owed to the U.S. Government by creator Ross Ulbricht.
More than $183 million is owed by Ulbricht in fines from illegal sales undertaken via the dark web platform. Prosecutors canceled this debt under one essential condition:
The Justice Department appears to have made a deal with Ulbricht to avoid any claim he might have made to the money: In exchange for Ulbricht’s agreement to waive any ownership he might have of the bitcoins, a portion of them will be used to pay off his restitution in its entirety.
Given that the crypto stolen by Individual X had once belonged to Ulbricht, he would have had a claim to the 69,370 BTC currently sitting in a U.S. government wallet.
The wallet to watch
The U.S. Justice Department seized the wallet from a person known only as “Individual X.”
The wallet contained 69,370 BTC and similar amounts of coins from forked projects. At today’s prices, the hoard is worth $2.7 billion and was transferred to a wallet owned by the U.S. Justice Department in November 2020.
The Feds likely moved the funds to ensure that no one with access to the private keys could move the BTC and as a safeguard against the hacking community. While it is improbable that a random hacker could access the wallet, there have been numerous attempts over the years and listings for the private keys online.
The wallet to watch is visible to all by simply viewing the blockchain data. If funds move from this wallet, it is likely only to do one thing; sell. The U.S. has a policy of either selling or auctioning off any seized crypto rather than hodling.
What happens if it is sold?
The 24-hour volume for Bitcoin currently sits around $16 billion. If the U.S. were to sell the confiscated treasure trove of 69,370 BTC, that would account for an increase of around 19% daily volume.
The most common way for the U.S. government to sell off their seized Bitcoin is through the U.S. Marshals Service, with the most recent sale in February 2020 for 4,041 BTC.
Currently, they hold the BTC in custody with Anchorage Digital. The recovered BTC is held in this wallet: