Crypto X buzzes over the approval of the Silk Road bitcoins dump: What do people say?

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As a crypto investor, I’ve been following the developments regarding the 69,370 BTC seized from the Silk Road marketplace. It’s fascinating to learn that this sale was approved by the U.S. government just weeks before President Trump took office. The question on everyone’s mind is: Will this sale actually happen?

The Bitcoin community has been abuzz with speculation about the implications of this decision. Some see it as a positive step towards legitimizing cryptocurrencies, while others are concerned about potential market manipulation. As an investor, I’m keeping a close eye on the situation to gauge the reactions and understand how this move might affect the broader crypto landscape.

Back in November 2020, the Northern District Court of California gave its approval for the sale of the bitcoins that were confiscated from the Silk Road online marketplace following its shutdown several years ago. This decision marks the end of a four-year-long legal dispute regarding the fate of these digital assets that had been seized.

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How did the approval become possible?

On December 30, 2024, a significant development occurred in the legal dispute when Chief U.S. District Judge Richard Seeborg refused a request to halt the confiscation of the Bitcoins. This decision allowed the Department of Justice to sell the Bitcoins linked to Silk Road.

It seems that the bitcoins might not be immediately sold due to some appeals and administrative procedures that need to be addressed first, making it uncertain as to when or even if the sale will actually occur.

Despite the Silk Road black market being closed in 2013, its digital wallet was breached. It wasn’t until 2020 that the individual controlling approximately 69,300 bitcoins linked to the online marketplace decided to surrender these funds to the government.

Among the competitors vying for these bitcoins was Battle Born Investments, but in October 2024, the U.S. Supreme Court chose not to hear a case, which ultimately led to the approval of the sale that was widely reported on January 9, 2024.

The political subtext

Previously at the Bitcoin conference in Nashville, Donald Trump declared that under his presidency, the United States would not dispose of its bitcoins. He pledged that his administration would retain 100% of any bitcoins currently owned by the government or acquired in the future, aiming to amass a vast Bitcoin reserve and establish the U.S. as the global leader in cryptocurrency.

The proposed sale of the confiscated bitcoins seems to directly conflict with the aims of the President-elect and his incoming administration. To some, it appears that current officials are deliberately sabotaging Trump’s policy as their tenure may be coming to an end soon, much like how Joe Biden allegedly pardoned Hunter Biden following Trump’s election win.

One plausible explanation could be that the current governing body regards Bitcoin as having limited value and seeks to offload it prior to the potential onset of a bear market. At present, approximately 69,370 Bitcoins, worth roughly $6.55 billion, are in their possession (as of January 9, 2024).

Opinions

Immediately following the court’s approval of the confiscated bitcoins, crypto X became quite active, expressing robust responses to the news. Many individuals, including the heads of multiple fintech firms, were vocally criticizing this decision with apparent pleasure. They often stated that if the DOJ decides to sell these bitcoins, Trump might purchase even more and potentially double his current amount.

Additionally, certain speakers expanded on the news by providing more profound perspectives. For example, David Bailey, CEO of Bitcoin Magazine, commented that selling the confiscated bitcoins intended for strategic reserves could be perceived as a “defiant gesture towards voters.” This action would contradict the priorities set by the lawfully elected President.

If the DOJ believes it can seize control of America’s Bitcoin reserves at the expense of the U.S. President’s policy objectives, simply to enrich their own department, they have another thing coming. This move would be a clear disregard for the American electorate.

— David Bailey🇵🇷 $0.85mm/btc is the floor (@DavidFBailey) January 9, 2025

As a crypto investor, I’ve observed that the DOJ might view the potential sale as an opportunity to bolster its own budget. Given that transferring $6.55 billion to the incoming administration may not be their preferred choice, they seem to be in a hurry to convert this amount into cash.

Custodia Bank’s CEO and vocal critic of Operation Choke Point 2.0, Caitlin Long, posed a thought-provoking query: Could government officials potentially purchase bitcoins following a price drop by offloading seized bitcoins at low prices?

They have a different perspective. They appear to believe that #bitcoin is destined for zero and are attempting to accelerate its descent by disrupting markets during downturns, which can be described as market manipulation. (If you’re curious, it’s legal if the government does it.) It’s intriguing to consider whether any government insiders will personally take advantage of the dip in the market…

— Caitlin Long 🔑⚡️🟠 (@CaitlinLong_) January 9, 2025

Caitlin suggests it might appear as market manipulation, yet she also mentions that “if the government does it, it’s considered legal.

According to John E Deaton, the creator of CryptoLawUS, he stated in a recent post that this action by Trump and David Sacks is likely to expedite the process of creating the SBR, as they may view the approval of the sale as an intentional disruption.

Although certain headlines might suggest that the crypto community is worried due to potential sales, it’s important to note that the 69,300 bitcoins in question represent a tiny fraction compared to the amount that figures like Trump or Senator Lummis are advocating for the U.S. government to possess.

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2025-01-09 23:36