Thus far, there have been several active and passive speculations about the tussle between the US government and other regulatory agencies against Bitcoin. However, at present, the cryptocurrency community is discussing such an event that can turn this cold war into a tooth and nail battlefield.
In the past, the US government reportedly confiscated around $1.7 billion worth of Bitcoin from the notorious underground hacking enterprise known as the Silk Road.
However, thus far government officials have retained the massive quantity of detained Bitcoin reserves. A recent court filing has made it into online circulation that the US government authorities are planning to sell this massive amount of Bitcoin.
The estimated quantity of this Bitcoin reserve is somewhere around 51,351 total units. This amount was confiscated from a Silk Road hacker named James Zhong.
Some media reports suggest that US authorities have already sold around 9,861 Bitcoins back into mainstream circulation. The value of the total seized amount of Bitcoin is estimated to be around $215 million.
The remaining amount under the possession of US regulators is now 41, 491 Bitcoin units. Zhong was arrested by the authorities on the account of stealing virtual assets from the Silk Road market which is a dark net sales and trade platform.
The current value of Bitcoin is as high as $28k per unit which makes the total Bitcoin reserve value with the government to be around the $1.175 billion mark. The filings of the said case took place at the Southern District Court of New York which deals with the criminal sentencing and processing of Zhong.
However, the US authorities have issued a statement declaring that they are not planning to sell out the remainder of the Bitcoin reserves until Zhong is sentenced.
The outcome of this case is going to decide the fate of the Bitcoin investors hanging in the balance. The massive amount of Bitcoin going back into the main circulation can play an important role in breaking the bullish streak.
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The US government also has access to 41,490 Bitcoins from the Ulbricht case. The authorities have plans to liquidate this amount in 4 installments over the current year.
For context, it is important to mention that Silk Road was an underground marketplace on the darknet. It remained operational from 2011 to 2013. This site was a hub for illegal activities such as money laundering and drug smuggling.
Zhong was caught exploiting the payment system of this site using fake accounts that allowed him to make rapid deposits and withdrawals and help him steal Bitcoins. He has pleaded guilty to wire fraud.
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