U.S. appeals court approves seizure of $3 billion worth of Bitcoin from Silk Road

The U.S. Court of Appeals for the Ninth Circuit recently concluded a landmark legal proceeding that formally authorized the seizure of 69,370 bitcoins and other assets. cryptocurrency From Silk Road, a defunct dark web marketplace. This judicial action implements a previous ruling that recognized the U.S. government’s legitimate claims over digital assets linked to Silk Road’s notoriously illegal activities.

The origins of this case date back to 2020, when the U.S. Department of Justice (DOJ) seized cryptocurrency worth more than $1 billion. Following this seizure, a legal application was filed for formal confiscation of the assets. The market value of the Bitcoin seized at the time of the seizure was over $1 billion, but has since been valued at more than $3 billion.

Founded and run by Ross Ulbricht from 2011 to 2013, Silk Road gained notoriety as an online platform selling drugs, weapons and other illegal goods. In 2013, the FBI intervened, the site was shut down, and Ulbricht was arrested. Ulbricht was subsequently found guilty of money laundering and operating a criminal enterprise. In a significant move, Ulbricht agreed to use $3 billion worth of stolen bitcoins to offset his debt to the U.S. government in 2022 and gave up ownership of 69,370 bitcoins.

Silk Road’s Bitcoin story also includes an individual known as “Individual X,” later identified as James Zhong. Zhong hacked Silk Road and took control of its funds. Last April, he was sentenced to federal prison for his actions. In particular, last July, a DOJ-related cryptocurrency wallet executed transactions involving approximately 9,825.25 Bitcoins worth approximately $299 million linked to Silk Road.

The US government, which currently owns these Bitcoin assets, places them under the custody of various federal agencies, including the DOJ and the Internal Revenue Service (IRS). Due to various illegal activities, the total value of Bitcoin assets currently held by the U.S. government is estimated at approximately $5.4 billion.

Image source: Shutterstock