US Government want to Sell Seized Silk Road Bitcoin

The US government has sold 9,861.1707894 of the 50,000 bitcoin seized in November 2022 following the arrest of James Zhong, who was accused of committing wire fraud in September 2012 for illegally obtaining over 50,000 bitcoin from the Silk Road internet marketplace.

The sale was made on March 14, 2023, for almost $216 million. The government intends to liquidate the remaining 41,490 bitcoins in four tranches over the course of this calendar year.

The sale is part of the case against James Zhong, who pleaded guilty in November 2022 and is set to be sentenced next month. The US government is selling the seized bitcoin and still has 41,490 bitcoins ($1.1 billion) to get rid of.

The US government has begun liquidating (selling) the 51,351.89 bitcoin forfeited in the Ulbricht case before Judge Schofield.

The sale of the seized bitcoin caused volatility in the cryptocurrency market, with bitcoin’s price rising as much as 9.7% in a 24-hour period before returning to parity.

However, bitcoin traders remain unperturbed by renewed concerns of selling pressure from the US government, as the cryptocurrency continues to trade around $28,000.

How much bitcoin was sold by the US government

The US government sold 9,861.17 Bitcoin (BTC) for almost $216 million on March 14, 2023, according to multiple sources. The Bitcoin sold is part of the 50,000 BTC seized in November following the arrest of James Zhong, who pleaded guilty to wire fraud after the government alleged he manipulated the transaction system on darknet market Silk Road in 2012.

Who was the hacker that stole the Bitcoin from Silk Road

James Zhong is the hacker who stole 50,000 bitcoins from the Silk Road dark net marketplace. The U.S. Department of Justice announced his conviction in November 2022. Zhong used to be a member of the Silk Road marketplace, which operated between 2011 and 2013 and had over 100,000 members.

In September 2012, Zhong stole 50,000 bitcoins from Silk Road by exploiting a flaw in the market’s transaction system. He funded nine different accounts with an initial deposit of 200 to 2,000 bitcoins and then triggered 140 withdrawal transactions in rapid succession. The hacker exploited a lag in the market’s transaction system, allowing someone to withdraw more bitcoins than they had deposited.

In November 2021, the U.S. government seized 51,351.9 bitcoins, valued at over $3.3 billion at the time of the action. The crypto was originally stolen from the Silk Road marketplace by James Zhong. Zhong pleaded guilty to wire fraud in 2021 after the government alleged that he manipulated the Silk Road transaction system in 2012 to pocket 50,676 bitcoins.

He kept the stash hidden for 10 years until it ballooned to hit a value of $3.3 billion. The U.S. government is now selling the seized bitcoins, and they still have 41,490 bitcoins ($1.1 billion) to get rid of.

What happened to the stolen bitcoin after it was seized by the government

The US government sold 9,861.17 bitcoin (BTC) for almost $216 million on March 14, 2023, according to a court filing. The bitcoin sold is part of the 50,000 BTC seized in November following the arrest of James Zhong, who pleaded guilty to wire fraud after the government alleged he manipulated the transaction system on darknet market Silk Road in 2012.

The government intends to liquidate the remaining 41,490 bitcoins in four tranches over the course of this calendar year. The US government has been selling bitcoin confiscated from the Silk Road case in 2013. The defendant, James Zhong, was accused of committing wire fraud in September 2012 for illegally obtaining over 50,000 bitcoin from the Silk Road internet marketplace. Zhong pled guilty in November 2022 and is set to be sentenced next month.

The US government sold the seized bitcoin through a court-approved auction. The proceeds from the sale will go to the US Treasury. The sale caused volatility in the cryptocurrency market, with bitcoin’s price rising as much as 9.7% in a 24-hour period before returning to where it was before. However, bitcoin traders remain unperturbed by renewed concerns of selling pressure from the US government, as the cryptocurrency continues to trade around $28,000.