US Government Sells 9,800 Bitcoins Looted From Silk Road Dark Market Worth IDR 3.1 Trillion
JAKARTA - Earlier this month, the United States (US) government had sold most of the Bitcoin (BTC) confiscated from the Silk Road black market. About 9,800 Bitcoins (BTC) were sold by the US earlier this month.
The sale generates revenue of around US$215 million (equivalent to Rp3.1 trillion) for the state treasury. However, there are still more than 40,000 BTC that have not been sold and are worth more than US$1 billion (Rp15 trillion).
Silk Road is a black market site on the dark web that allows users to buy and sell illegal goods such as drugs, weapons, and murder services. The site uses Bitcoin as an anonymous means of payment to protect the user's identity and avoid financial traces.
In 2012, a hacker named James Zhong managed to steal more than 50,000 BTC from Silk Road by exploiting security loopholes on the site. Zhong was later arrested by US authorities in November 2022 and pleaded guilty to charges of hacking and money laundering.
"In total from Zhong's investigation, the Government has obtained a final order for the handover of property of approximately 51,680.32 BTC], with a value of more than US$3.4 billion (Rp50.9 trillion) at the time of the confiscation," the court's filing said.
The US government then confiscated Zhong's stolen Bitcoin and received a court order to take over the asset. According to court documents released on Friday, the government has obtained property rights of 51,680.32 BTC linked to Zhong and Silk Road.
On March 14, the government sold around 9,861.2 BTC for an average price of 21,800 US dollars (Rp 326 million) per coin. This sale was made through a closed auction process involving selected buyers. On the same day, the price of Bitcoin fluctuated between $24,000 to US$26,500 (Rp397 million) in the global market.
The US government claims that it earned more than $215 million from the sale, after deducting transaction fees. They also plan to sell the remaining 41,500 BTC in the next four stages this year. However, they did not reveal when and how the sale would be made.
Bitcoin sales by the US government are nothing new. In 2014, they also released about 30,000 BTC confiscated from Silk Road to investors Tim Draper. At that time, the price of Bitcoin was only around 600 US dollars (IDR 8.9 million) per coin, but now it has almost increased 50 times.
The sale of Bitcoin by the US government shows that they recognize the value and legitimacy of crypto assets as a form of digital wealth. On the other hand, the sell-off also shows US efforts to bring down the crypto market amid widespread regulatory problems in the country.
Silk Road itself has been out of service since October 2013, when US authorities closed the site and arrested Ross Ulbricht, founder and manager of the site. Ulbricht is currently serving a life sentence without the possibility of parole.