US Government Nets $48 Million from Sale of Silk Road Bitcoins
The US government finally claimed $48 million USD earned from the sale of bitcoins seized from Silk Road, the online drug marketplace that was shut down in 2013.
It may have taken a couple of years, but the US government finally has their grasp on the money earned from their seizure and shut down of the notorious Silk Road marketplace. The online drug market was shut down in 2013, and the government seized a total of 144,336 bitcoins, which they auctioned off in 2014 and 2015. The holdup in getting the auction proceeds was a series of legal challenges from Ross Ulbricht, the original operator of Silk Road, that contested the legality of the seizure. Ulbricht has decided to drop his claims, which means that the US Justice Department now has $48 million USD in their pocket.
Taking Down the Silk Road
The online Silk Road marketplace was a haven for anonymous transactions for all sorts of illicit goods and activities, particularly narcotics. The main figure associated with Silk Road was Ross Ulbricht, who went by the moniker of the Dread Pirate Roberts (from the movie The Princess Bride). The site began as an anonymous venture, requiring word-of-mouth for exposure. Yet eventually the site became more well known, with Ross Ulbricht even giving Forbes an interview. Eventually, the authorities took notice and went to work to take Silk Road and the Dread Pirate Roberts down.
The operation was a success, and the FBI managed to track down Ross Ulbricht by examining a number of counterfeit ID documents in packages coming from Canada to the same address in San Francisco. Silk Road was shut down (even though other versions have popped up), and Ross Ulbricht was sentenced to life without the possibility of parole for money laundering, computer hacking, and conspiracy to traffic narcotics.
Timing is Always Important
Now we get to the part of the story where Bitcoin holders will shed some copious tears. The US Justice Department sold off the 144,336 bitcoins seized for an average of $334 each back in 2014 and 2015. If they had waited until Ross Ulbricht finally dropped his claim about illegal seizure, those same bitcoins would net around $630 million today.
As for the $48 million USD, there’s no word on where exactly the money will go. It could go to the FBI, IRS, or even the US Treasury. Of course, one can assume that the money will be wasted as the federal government is rarely a good advocate of financial responsibility.
What do you think about the US government finally getting the $48 million raised from selling 144,336 bitcoins? Let us know in the comments below.
Images courtesy of Wikimedia Commons.