Following the news that the US Department of Justice (DoJ) has forfeited USD 1 billion worth of bitcoin (BTC), market players are now discussing possible scenarios what could happen next.
Per the DoJ, the bitcoin was seized by law enforcement on November 3, following an investigation that included tracking down crypto transactions. “The seizure represents the largest seizure of cryptocurrency in the history of the Department of Justice,” they said.
After this move, the US government now controls the 5th richest BTC address (and the 3rd richest if we exclude addresses controled by crypto exchanges).
Furthermore, the court documents show that the law enforcement seized more than BTC 69,370, as well as similar amounts of bitcoin cash (BCH), bitcoin gold (BTG), and bitcoin SV (BSV).
Meanwhile, many presume that the seized bitcoin, if it gets under full control of the US government, will be auctioned off. Others, however, find that, whether the government decides to “hodl, dump or burn the stash […] Every option is good for bitcoin.”
Give it out as a stimulus package
Network effects are fun when every American gets part of a $BTC
— Tom Shaughnessy (@Shaughnessy119) November 6, 2020
Meanwhile, per Binance Research, the seizure announcement “might have contributed to the last day’s price movement as investors recognized the Justice Department’s ownership as effectively locking up supply until a potential auction at a later date following the case’s closure.”
At the time of writing (10:33 UTC), BTC trades at USD 15,632 and is up by 8% in a day and 18% in a week. The price traded around USD 15,900 earlier today (UTC time).
How it all happened
As Our reported two days ago, BTC 69,369 which are believed to be from the infamous Silk Road darknet market, had been moved for the first time in the last five years.
The United States Attorney David L. Anderson of the Northern District of California, said in a Department of Justice statement that,
“The successful prosecution of Silk Road’s founder in 2015 left open a billion-dollar question. Where did the money go? Today’s forfeiture complaint answers this open question at least in part. [USD] 1 billion of these criminal proceeds are now in the United States’ possession.”
The investigators had tracked the transactions via a “third party bitcoin attribution company,” which led them to 54 previously undetected bitcoin transactions executed by Silk Road, and ultimately to relevant bitcoin addresses.
Blockchain analytics specialist Chainalysis is a company that helped the investigation analyze the transactions.
The US government claims it knows the identity of the “Individual X,” the person connected to the address, in which the USD 1bn worth of BTC was found, and from which BTC 101 was sent to crypto exchange BTC-e (which was taken down by the US law enforcement in 2017).
Imagine sitting on a billion dollars in stolen bitcoin and not investing in improving your security and privacy.
— Jameson Lopp (@lopp) November 5, 2020
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Learn more:
‘The Best and Cleanest Bitcoin is From the Silk Road’
A Bright Side to the Dark Web
