The U.S. Court of Appeals has given the green light for the seizure of cryptocurrencies linked to Silk Road, a darknet platform.
This ruling, adopted on December 20, sanctions the confiscation of 69,370 Bitcoins (BTC) and assorted cryptocurrencies in connection with the Silk Road case. Involved parties encompass Silk Road’s creator, Ross Ulbricht, and the U.S. government as the prosecuting entity.
Although the decision was initially made in August, its enforcement awaited validation from the U.S. Court of Appeals. Per the original complaint, the U.S. government gained control over the cryptocurrency, previously transferred by a figure known as “Individual X,” who hacked Silk Road and took charge of its funds.
In 2020, the U.S. Department of Justice moved to seize and formally confiscate the cryptocurrency, valued at over $1 billion (now exceeding $3 billion). Ulbricht was arrested on October 2, 2013, and in 2015, a U.S. court sentenced him to two life sentences plus 40 years without parole.
The confiscated Bitcoins now position the U.S. government as one of the significant BTC holders, boasting ownership of approximately 195,000 BTC, almost 1% of the total supply. The bulk of these assets in government possession have been seized from cybercriminals.
These funds are securely stored offline in hardware wallets, managed by entities like the Department of Justice (DoJ), the Internal Revenue Service (IRS), and other agencies. When a government body takes control of a cryptoasset, it doesn’t immediately become U.S. property. Instead, a confiscation order is issued by the court, and upon ownership transfer to the government, the asset is passed to the U.S. Marshals Service for liquidation into fiat currency.
