- The U.S. authorities has begun liquidating the bitcoin it seized from Silk Highway exploiter James Zhong.
- The DOJ already bought 9,861 BTC on March 14, netting $215.5 million.
- It plans on promoting the remaining 41,490 BTC in 4 installments over the course of the yr.
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On-chain analysts seen in the beginning of the month that the U.S. authorities was shifting funds it had seized from Silk Highway exploiter James Zhong. It seems that the DOJ was maneuvering to promote a few of the stash.
Dumping Silk Highway Bitcoin
The U.S. authorities is promoting a few of its bitcoin holdings.
A brand new submitting from the USA Division of Justice signifies that a few of the bitcoin seized by authorities from Silk Highway exploiter James Zhong has already been bought.
In response to the doc, the federal government held at one level a complete of 51,351 BTC (value roughly $1.4 billion at at the moment’s costs) in connection to Silk Highway—nearly all of which got here from Zhong. Of those holdings, 9,861 BTC have been bought on March 14, netting the DOJ over $215.5 million. The submitting states that the federal government paid roughly $215,738 in charges for the transaction. It plans to promote the remaining 41,490 BTC ($1.1 billion) in 4 extra installments over the course of the calendar yr—although it’s going to wait till Zhong’s sentencing to liquidate the second batch.
Zhong is accused of defrauding darknet market Silk Highway by exploiting the platform’s withdrawal mechanism in September 2012. U.S. authorities managed to grab Zhong’s stash of fifty,676 BTC in November 2021. Zhong pleaded responsible to at least one rely of wire fraud in November 2022. Although he faces as much as 20 years in jail, he just lately requested the courtroom to spare him jail time, on account of his tough childhood, autism, and the truth that his crime was victimless. He’s scheduled for sentencing on April 14.
It’s extremely seemingly that the federal government used Coinbase to promote its 9,861 BTC. On-chain analysts seen in the beginning of March that wallets related to seized Silk Highway funds had moved roughly 49,000 BTC to numerous contemporary addresses. One in every of these addresses was recognized as belonging to crypto change Coinbase; it obtained 9,825 BTC on March 7.
The DOJ’s use of Coinbase is atypical, as the federal government has traditionally most popular liquidating seized digital belongings by means of public auctions.
Disclosure: On the time of writing, the creator of this piece owned BTC, ETH, and several other different crypto belongings.