In a recent development, the US government has issued a notice on its plan to sell over 2,933 Bitcoin (BTC) worth over $130 million seized from the now-closed online black market Silk Road.
The notice of forfeiture is in keeping with the US Attorney General’s directive for such disposals, says the document. The US government by the notice, gives 60 days from the publication date (Jan. 10), for any third party claiming interest in the forfeited property to file an ancillary petition.
Tracing the Silk Road Path to the Seized Bitcoin
The saga all began in 2018 after a then 32-year-old Ryan Farace pleaded guilty to charges of manufacture and sale of alprazolam tablets a.k.a Xanax for bitcoin via darknet marketplaces. Forensic investigation via cryptocurrency tracing disclosed a total of over 9,138 BTC linked to transfers to Farace or his alias “Xanaxman”. Some of the bitcoins were seized, however Farace claimed he didn’t have any way of accessing the rest of his bitcoin stash.
Fast forward to August 2020, Farace who was now incarcerated, conspired with his father Joseph Farace to transfer 2,874 BTC to a third party in a bid to move it to a foreign bank account. Though the transfer went successfully, Federal agents got wind of it and seized all the 2,874 BTC in February of 2021. Later in May of 2021, the Government also seized over 58.74 BTC which was part of Farace’s drug trafficking proceeds.
The son was sentenced in January last year to 54 months in federal prison, while the father was sentenced on January 8, 2024, to 19 months in prison and 2 years of supervised release. Another notable character in the story is former Special Agent Sean Bridges, also mentioned in the US government’s forfeiture notice.
Bridges was an investigator in the Silk Road case but got his hands sullied with money laundering involving 3,100 BTC in total and other fiat currency. He seems to be an accomplice to Farace’s last 2,874 BTC transfer with the forfeiture document reading “2874.904256 Bitcoin… seized from Ryan Farace and Sean Bridges on February 10, 2021…”. Bridges now serves a combined prison sentence of 95 months.
Market Volatility? Investors Brace For Impact Following Silk Road Auction
The US government’s intention to dispose of the confiscated bitcoins is being analyzed from different perspectives in the crypto industry. Many analysts believe it will have no consequences on Bitcoin’s charts being that it’s not even up to a tenth of the Bitcoin Grayscale has sold since its spot ETF approval.
The other side thinks that it’s a subtle strategy By the US government to stir up FUD (Fear, Uncertainty, and Doubt) in the Bitcoin ecosystem for their selfish interests in Bitcoin The US currently holds over 200,000 Bitcoin, according to Forbes, worth over $8 billion at the moment and way more than the bitcoin owned by any other country. Whatever the case, the industry will find out how it plays out after the March 10 ancillary petition deadline.