Court Approval for 69,370 Bitcoin

The U.S. District Court for the Northern District of California issued a ruling on December 30 authorizing the Department of Justice to liquidate 69,370 Bitcoin. Chief Judge Richard Seeborg rejected opposing motions to prevent the sale.

These Silk Road-linked Bitcoin holdings are valued at approximately $6.5 billion. The Department of Justice, which had previously begun selling in smaller tranches, transferred about $2 billion worth of Bitcoin to Coinbase on December 3, 2024. The Department maintains a custody arrangement through the U.S. Marshals Service via Coinbase Prime.

Origin of Silk Road Bitcoin and Background

The seized Bitcoin originated from illegal transactions on Silk Road, a dark web marketplace shut down in 2013. These assets were surrendered to authorities in 2020 by a mysterious figure known as “Individual X.” The Department of Justice faced numerous lawsuits and objections during a four-year legal battle. However, the court rejected all challenges and approved the sale of the Bitcoin.

Should There Be Cause for Panic?

While the sale of Silk Road Bitcoin has the potential to create market fluctuations, experts indicate this won’t be catastrophic for the market. Ki Young Ju, CEO of blockchain analysis platform CryptoQuant, stated that the market saw approximately $1 billion in daily inflows last year and could absorb the government’s $6.5 billion sale within a week. Additionally, some crypto commentators suggest these sales may have already occurred.

The liquidation of Silk Road Bitcoin represents both a historic financial resource for the U.S. government and a significant milestone for the cryptocurrency market. This process appears likely to remain a topic of both legal and political discussion for some time. However, experts consensually advise against market panic.

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The United States Attorney’s Office revealed an additional charge for Terraform Labs co-founder Do Kwon following his extradition from Montenegro: money laundering conspiracy.

In a new indictment filed on January 2 in the U.S. District Court for the Southern District of New York, U.S. Attorney Damian Williams alleged that Kwon conspired with others to commit money laundering.

According to the U.S. Attorney, the Terraform co-founder facilitated transactions of over $10,000 on the platform, knowing that the property involved in certain financial transactions represented the proceeds of unlawful activity.

The money laundering charge was not initially part of the eight-count indictment filed against Kwon in March 2023. Prosecutors filed the indictment under seal in May 2024, and on January 2, a judge ordered the unsealing of the indictment during Kwon’s court appearance.

Kwon, who is alleged to have been involved in the 2022 collapse of the Terra ecosystem, was arrested and detained in Montenegro in 2023 for using falsified travel documents. Authorities from the U.S. and South Korea filed competing petitions to extradite the Terraform co-founder, but Montenegrin authorities did not make a decision on his legal status until December 2024, when Kwon was handed over to U.S. officials.

Will It Be A Court Trial or A Settlement Agreement?

The Terraform co-founder appeared in court on January 2, pleaded not guilty to all charges, and agreed to remain in detention. It remains unclear whether U.S. authorities will consider a plea deal or move forward with the charges.

Kwon’s case is similar to that of former FTX CEO Sam “SBF” Bankman-Fried, another crypto executive who was subject to the jurisdiction of another country (the Bahamas) before being extradited to the U.S.

In SBF’s case, his lawyers argued that a campaign finance charge added to a superseding indictment should be dropped, as it was not part of the extradition request.

Bankman-Fried was convicted on seven felony counts and sentenced to 25 years in prison, but he has filed an appeal.

Former Binance CEO Changpeng Zhao pleaded guilty to one charge and served four months in prison in 2024.

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