Share Button

Photo source: http://www.flickr.com/photos/100239928@N08/

Photo source: http://www.flickr.com/photos/100239928@N08/

When the FBI took down the original Silk Road operation last October, it also seized 29,655 Bitcoin from the site. At peak prices, the seized coins were worth $35.5 million, but thanks to the volatility of the current market, they’re currently worth less than half that amount. Last month, the US Attorney’s Office of the Southern District of New York was given clearance by US District Judge J. Paul Oetken to sell the Bitcoin supply in an effort to stabilize the value of the seized property.

This week, Bitcoin investment firm Falcon Global Capital contacted the U.S. government with a bid to purchase all of the seized Silk Road Bitcoins at 15% below market value. Speaking with Business Insider, co-founder Brett Stapper said Falcon has investor capital for the bid, but added that “[the FBI has] not given us a yes or no yet. However, our lawyers are making calls daily to follow up on this.”

While it’s certainly possible that the FBI would be interested in such a deal, there’s no indication that Falcon Global Capital or any other group is close to a deal. Speaking with Forbes last month, Manhattan U.S. Attorney Office spokesperson Jim Margolin said “We have not yet determined exactly how the Bitcoins will be converted and liquidated.”

One reason for this is that there is no existing precedent for handling the liquidation of Bitcoin seizures. The massive scale of the seizure and murky process, not to mention the U.S. Attorney Office’s inexperience with Bitcoin, are also contributing to the slow liquidation.

It’s worth noting that the 29,655 seized Bitcoins in question are only a fraction of the Silk Road haul. Another 144,000 Bitcoins ($74,880,000 at current prices) were seized from the personal wallet of Ross Ulbricht, the 29-year-old accused of being Silk Road admin “Dread Pirate Roberts.” Ulbricht’s legal team has filed injunctions to prevent these Bitcoins from being sold until the criminal case is resolved.

Share Button