Highlights:
- U.S. Court rejects Battle Born’s appeal over ownership of 69,370 seized Bitcoin worth $4.38 billion.
- Battle Born Investments fails to prove ownership rights to seized Bitcoin linked to Ngan.
- The government retains control over Bitcoin, paving the way for a significant sale.
The United States Supreme Court has declined to hear an appeal regarding the ownership of 69,370 Bitcoin (BTC), valued at $4.38 billion, which the U.S. government seized from the Silk Road dark web marketplace.
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US SUPREME COURT TURNS DOWN CASE INVOLVING $4.4B IN SILK ROAD BITCOIN
The US Supreme Court just ghosted a case over 69,370 Bitcoin—around $4.4 billion—seized from Silk Road.
Battle Born Investments tried to snag the rights through a bankruptcy hustle, but the courts weren’t… pic.twitter.com/uUzJltjm2f
— Mario Nawfal’s Roundtable (@RoundtableSpace) October 8, 2024
In the dismissed appeal, Battle Born Investments asserted that it had acquired rights to the seized Bitcoin through a bankruptcy estate linked to an individual named Raymond Ngan. The company presented itself as “an innocent owner of all of the Defendant Property.” It argued that Ngan was “Individual X,” the unidentified hacker who stole the Bitcoin from Silk Road and subsequently handed the wallet over to law enforcement.
The firm was unable to convince the courts in 2022 and again in 2023 when it appealed to obtain the BTC through a bankruptcy claim following the shutdown of Silk Road in 2013. A San Francisco appellate court judge dismissed the case last year, stating that the firm did not have a valid claim to the BTC haul.
Additionally, the Supreme Court’s decision not to hear the case leaves the government’s control over the cryptocurrency largely unchallenged. This ruling also allows the U.S. government to sell its substantial BTC stash.
Court Rejection of Battle Born’s Appeal Paves the Way for Significant BTC Sale
The U.S. Marshals Service is expected to oversee the liquidation after the Supreme Court rejected Battle Born’s ownership claims. Although several formalities remain before the sale can proceed, experts expect it to become one of the largest sales of seized Bitcoin in history.
The government has already started moving some of the Bitcoin linked to the Silk Road. On July 29, approximately $2 billion worth of the cryptocurrency was transferred, with custody managed by the U.S. Marshals Service through Coinbase Prime.
UPDATE: The U.S. Government has split the $2B Bitcoin into two addresses:
10,000 BTC ($669.35M): bc1qlap8hkt9genaljz5nt2zlehhudx63zlahr2zek
19,800 BTC ($1.33B): bc1qngydl7hmgdtmuqjmtsyj3pcwszv0yn5mj6kz4cWe believe this represents a 10,000 BTC deposit to an institutional… https://t.co/0aULBXGd8P pic.twitter.com/RTwtaqvMmM
— Arkham (@ArkhamIntel) July 29, 2024
Governments selling such large amounts of Bitcoin often lead to market fluctuations. For instance, in June and July, the German government sold nearly 50k BTC, valued at over $3.15 billion, contributing to significant market volatility.
Rise and Fall of Ross Ulbricht and the Silk Road Empire
Ross Ulbricht, known as “Dread Pirate Roberts,” created and ran the dark web marketplace Silk Road from 2011 to 2013. Before its closure after his arrest in late 2013, Silk Road was a major criminal marketplace offering drugs, hacking tools, hitmen for hire, and weapons.
Silk Road operated anonymously on the Tor network and used Bitcoin as its main currency, employing a crypto mixer to make tracking transactions difficult. At the time of its shutdown, it had over 100,000 buyers and generated over 9.5 million Bitcoins in sales, earning more than 600,000 Bitcoins in commissions.
The FBI arrested Ulbricht in October 2013, sentencing him to life in prison without parole for money laundering, conspiracy to traffic narcotics, and computer hacking. In 2020, the IRS used a Bitcoin attribution company to analyze Silk Road transactions, uncovering 54 previously undetected transactions linked to a hacker who stole Bitcoin between 2012 and 2013.
The investigation connected the hacker to “Individual X.” Valued at over $1 billion during the investigation, the Bitcoin’s worth has since more than quadrupled, making it the largest seizure of crypto assets to date.
Trump Proposes U.S. Bitcoin Reserve and Pardon for Ross Ulbricht
While the seized Bitcoin is likely to be sold at market price, former President Donald Trump, a Republican presidential candidate, proposed using it to create a U.S. strategic Bitcoin reserve.
At the Bitcoin 2024 conference in July, Trump stated:
“As the final part of my plan today, I am announcing that if I am elected, it will be the policy of my administration, the United States of America, to keep 100% of all the Bitcoin the U.S. government currently holds or acquires into the future.”
Trump has also promised to pardon Ross Ulbricht, aiming to attract libertarian votes as cryptocurrency gains bipartisan support. In September, Democratic nominee Kamala Harris showed her support for the crypto industry, positioning herself as more favorable than President Joe Biden.
Last night, Donald Trump pledged to commute my sentence on day 1, if reelected. Thank you. Thank you. Thank you.
After 11 years in prison, it is hard to express how I feel at this moment. It is thanks to your undying support that I may get a second chance.
— Ross Ulbricht (@RealRossU) May 26, 2024
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