FBI May Liquidate the Seized Bitcoin from Silk Road

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FBI May Liquidate the Seized Bitcoin from Silk Road
FBI May Liquidate the Seized Bitcoin from Silk Road

FBI May Liquidate the Seized Bitcoin from Silk Road

There are too many questions about the seized Bitcoin from Silk Road. Whereas some observers estimate that the government may give them back to users in an auction, some others are of the opinion that the FBI may liquidate them.

The same views have been given by Jon Matonis, executive director of the Bitcoin Foundation who said that if the FBI liquidates the seized amount, it would definitely have a temporary impact on the market because it would take out some of the supply.

Earlier Kashmir Hill of the Forbes had reported that answering her question that what would the FBI do with the seized Bitcoins, a spokesperson for the organization had retorted that they will probably liquidate them. Currently, U.S. authorities are a major Bitcoin player as they own close to $3.6 million in Bitcoin.

Currently, Bitcoinchain is storing 27,365.90751348 BTC for the government and according to Matonis he had little clue about the decision from the FBI. He said that in case FBI chooses to liquidate the seized Bitcoins into dollars at some time later, it would need to select and contact a Bitcoin exchange to perform the transaction.

Matonis said that the FBI may also delete the stash the way it treats other illegal substances. However, in that situation it will have to make available the identifying alphanumeric figures of each Bitcoin it holds.

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Currently the seized amount stands at 27,365.90751348 BTC belongs to Silk Road account which genuinely belongs to the Silk Road users. Thus, the FBI has not yet been able to figure out how much Ross Ulbricht’s personal Bitcoin account has and according to them nearly $80 million worth of Bitcoin may be stashed in his personal account.

The 29-year old, Ulbricht was arrested last week and is charged with being the administrator of the site which has now been shut down. Some other charges he has on include trying to arrange the killing of one of the site’s users. However, his lawyer denies all these charges; the next hearing will take place on 9th October.

The entire Silk Road episode has also brought in a positive indication as in the complaint note the FBI wrote that Bitcoins are not illegal in and of themselves and have known legitimate uses. Thus, there is no danger for Bitcoin from the FBI but companies like Silk Road are definitely not going to operate very soon.

To contact the reporter of this story: Deepak Tiwari at deepak@forexminute.com