The US Department of Justice (DOJ) is once again in the spotlight for transferring Bitcoin previously linked to the notorious darknet marketplace, Silk Road. This move comes nearly four months after the DOJ converted a hefty portion of the seized cryptocurrency into cash through Coinbase.
On the morning of July 12, a string of Bitcoin transactions was lined up, waiting for confirmation. The wallets, tied to the DOJ, were set to relocate 9,825 Bitcoin, which is approximately valued at $302.2 million. These Bitcoin assets were transferred to unused wallet addresses, a move reminiscent of the DOJ’s previous handling of Silk Road Bitcoin. However, it’s important to note that this doesn’t necessarily indicate an impending sale.
Earlier this year, in March, the DOJ unloaded 9,800 Bitcoin on the US platform Coinbase, with each token valued at $21,800, resulting in a total of $215 million. At that point, officials had disclosed plans to liquidate an extra 41,500 BTC, amounting to about $1.27 billion. These were seized from James Zhong, a hacker linked to Silk Road, and were to be sold in four different segments.
This recent flurry of transactions had a slight impact on Bitcoin’s market value, causing a dip that set the price around $31,600.Silk Road, remembered as the pioneer Bitcoin marketplace, was dismantled in October 2013 when its founder, Ross Ulbricht, was arrested by US authorities. Ulbricht was subsequently charged and sentenced to life in prison plus 40 years, with no parole option.
Interestingly, these latest DOJ Bitcoin transactions associated with Silk Road have hit a snag with delayed confirmations, likely due to the insufficient transaction fees allocated. At the time, two transactions had been hanging in the balance for 20 and 40 minutes, respectively. The DOJ had seemingly set aside a modest $8 in fees for these transactions, a nominal sum considering that Bitcoin blocks are typically processed once every 10 minutes.
In a stark contrast to this, during the prior sale of Silk Road-related Bitcoin, the US government footed a bill of over $215,000 in transaction fees, as revealed in court records.Per a tracker that monitors government-seized Bitcoin, the Federal authorities’ decision to sell instead of hold the Bitcoin may have led to a missed opportunity, potentially worth up to $5.6 billion.
Later on, around 11:09 am ET, two of the transactions were finally confirmed after waiting for about an hour. Meanwhile, a third transaction continued to be pending for almost two hours. It wasn’t until approximately 11:31 am ET that the third transaction was fully processed, ending a wait of about two hours and five minutes.