The United States government has planned the auction of bitcoin seized during the Silk Road era: possible consequences.
The United States government has recently announced its intention to auction confiscated bitcoin from the Silk Road era, valued at nearly $118 million. The announcement was initially made through a forfeiture notice on January 10 and later shared on social media on January 24.
The quantity of bitcoin in question, totaling 2,934 BTC, stems from a seizure involving Ryan Farace and his father, Joseph Farace, who were convicted on January 8 for conspiracy to commit money laundering.
“According to their guilty pleas and other court documents, in November 2018, Ryan Farace was convicted in U.S. District Court in Maryland for a scheme to manufacture and distribute alprazolam tablets (sold under the brand name “Xanax”) in exchange for Bitcoin through sales on darknet marketplaces.”
The planned sale by the U.S. government represents only 1.5% of the total estimated 194,188 bitcoin it holds from three seizures made in criminal cases. Overall, the quantity held by the U.S. government is less than 1% of Bitcoin’s circulating supply.
The impact on the market
The news has raised concerns among some members of the Bitcoin community, fueling the prospect of a potential ‘dump’ in the bitcoin price on the market.
Steven Lubka, managing director at Swan Bitcoin, has stepped in to ease concerns. Lubka wanted to emphasize that the amount of bitcoin involved in this sale is negligible when compared to the outflow of bitcoin from the Grayscale Bitcoin Trust (GBTC) last week.
According to Lubka, the selling volumes of GBTC are four times larger than the planned sale by the United States. The GBTC fund has recently sold 106,575 bitcoin, approximately $4.2 billion, since its conversion into an ETF. The last recorded outflow was 10,871 bitcoin on January 24th.
