The United States government has taken a major step to sell a substantial amount of Bitcoin (BTC) forfeited by a convicted Silk Road drug trafficker.
The U.S. government has initiated a proceeding to sell more than $117 million worth of Bitcoin (BTC) seized from a convicted drug trafficker who operated in the now-defunct dark web marketplace Silk Road.
US Government Files Notice to Auction Forfeited Bitcoin
Notably, the government filed the notice on January 8, 2024. However, it went viral this week, with the U.S. government revealing plans to dispose of the seized BTC.
According to the filing, the upcoming auction involves nearly 2,874 BTC seized from the convicts Ryan Farace and Sean Bridges in 2021, with another 59 BTC belonging to Farace alone.
At the current exchange rate of $41,119, the Bitcoins are now valued at around $120 million. However, at the time of the filing on January 8, the crypto assets were worth $133 million.
Farace Conviction and Forfeiture
For context, the Department of Justice (DoJ) charged Ryan in 2018 for the role he played in illegally selling Xanax on dark web marketplaces like Silk Road. He ran his operations using the pseudonym Xanaxman.
Notably, Ryan received Bitcoin in exchange for Xanax, a drug used to treat panic and anxiety disorder. The U.S. government said Ryan received a total of 9,138 BTC for the drug-related transaction, worth about $375 million at press time.
In 2020, Ryan forfeited only 24 Bitcoin, claiming he had no access to the remaining BTC associated with the dark web transactions.
While in prison, he instructed his father, Joseph Farace, to transfer 2,874 BTC to a third party with the intention of moving the funds out of the United States. The duo admitted to the crime and have been sentenced to prison for money laundering conspiracy.
Ryan bagged an additional 54-month prison sentence on January 5, while his father received a jail term of 19 months.
Silk Road-Related Bitcoin Forfeitures
It is worth mentioning that the United States government has confiscated large amounts of Bitcoin linked to Silk Road, a notorious online marketplace shut down in 2013.
In November 2022, the government seized 50,676 BTC from James Zhong for perpetrating wire fraud via the dark web marketplace. Following the seizure, the U.S. government’s Bitcoin holdings surged to 210,000 BTC at the time.
A few months later, the government moved 9,825 from three wallets holding the confiscated funds to 101 addresses.
Crypto community members typically express concerns whenever the U.S. government announces plans to auction confiscated Bitcoins or move the funds to multiple addresses.
Dumping a large amount of these Bitcoins in the market could have a bearish impact on the asset’s price. As of press time, Bitcoin is up 3.2% in the past 24 hours to $41,119.
Disclaimer: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic’s opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
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