Opinion: US Government Will Sell All Silk Road Bitcoins

2 months ago 33

Experts believe that the US Marshal Service (USMS) plans to sell all remaining Silk Road Bitcoin (BTC) after transferring the confiscated funds to new addresses.

As the entity responsible for managing seized assets, the USMS — effectively representing the US government — may be taking action under political influence.

US Marshal Service Likely Selling Silk Road Bitcoin

Scott Johnsson, a finance lawyer, believes the US Marshal Service is “most certainly” selling Silk Road Bitcoin. This speculation arises after a series of BTC transfers to a custodial address, as outlined in the June servicing agreement between the USMS and Coinbase.

Johnsson noted that, per the agreement, USMS assets must remain fully segregated. The movement of these funds aligns with the terms, further fueling speculation that the government intends to liquidate the seized Bitcoin soon.

“Whenever a transfer is ultimately made to Coinbase Prime (or other commingled exchange address), you can be sure USMS has already sold or is selling imminently,” Johnsson shared.

Johnsson believes the USMS will reveal the sales at its chosen time, possibly in the DOJ’s FY2024 report. He also notes a political angle, suggesting the transactions accelerated after Trump’s Bitcoin 2024 Conference appearance in Nashville.

Among Trump’s key points were creating a “Strategic Bitcoin Reserve” and halting government-owned BTC sales. Many believe Trump’s chances could have been better if he had kept his intentions private until potentially taking office.

“It will be the policy of my administration…to keep 100% of all the Bitcoin the US government currently holds or acquires into the future. This will serve in effect as the core of the strategic national bitcoin stockpile…It’s been taken away from you,” Trump said.

Some crypto proponents are optimistic about a potential Trump administration. Others, like former Goldman Sachs executive Raoul Pal, have concerns over a government-held Bitcoin reserve.

Speaking with SkyBridge Capital founder Anthony Scaramucci, Pal highlighted the government’s history of abusing power, raising doubts about what such a reserve could mean for Bitcoin. Critics argue that centralized control could conflict with the decentralized principles Bitcoin was built on. They worry this move might undermine the original vision of cryptocurrency.

“Yes, it’s good for the crypto market because there’s yet another buyer. However, it is also weird because Bitcoin was set up to try to replace the government’s control over money, and now you are inserting the government as one of the largest buyers of private money. I don’t like that …If the government can manipulate it, they could dump it onto the market. They could buy more, and before you know it, they’re using it like they are interest rates in controlling regular money, and we don’t want that,” Pal expressed.