US Federal Authorities Collected Almost $50 mln in Bitcoin Seizing Action. One of the biggest issues that not only Bitcoin but rather all digital currencies are exposed to is the fact that they have been used in different illegal activities. Authorities from all over the world issued warnings several times indicating that criminals are using those digital currencies in order for the authorities to lose a track of their financial activities. In 2013, the United States authorities conducted one of the biggest cyber actions when they shut down a site called Silk Road.
For those who are still not aware of Silk Road, this site was the biggest online drug market and this site could be reached only by using special browsers because it was located on the deep web. In the course of that operation the US authorities seized a huge number of Bitcoins and during 2014 and 2015 those Bitcoins found themselves on the market as US authorities were selling them.
Challenging the Legality
The founder of Silk Road was a student Ross Ulbricht, who was arrested during that action and sent to prison. As a result of the operation, the US authorities seized a huge amount of Bitcoins which they decided to sell on the auction. In the end, it was revealed that the US authorities have sold those Bitcoins for the total amount of $48.2 million.
However, that was not the end of Silk Road and the Bitcoins taken there. After it became clear that the authorities had sold the Bitcoins, Ross Ulbricht filed a lawsuit against the authorities challenging the legality of that move. He claimed that the US authority did not have the right to sell those Bitcoins because he was the owner of those Bitcoins.
The issue was debated for a long time, but a big shift in this case came just yesterday when it was revealed that Ross Ulbricht had agreed to drop the ownership claims over those Bitcoins. That means that the US government is now finally able to claim the proceeds of that sale. The reason why Ulbricht dropped those claims is still not known and it probably will never be known because he is behind bars and it seems that he will be staying there for a long time.
Bad Timing
The US government decided to sell those Bitcoin back in 2014 and 2015 when the value of Bitcoin was not that big. At the time of the sale, the value of Bitcoin was $334. This was obviously a very bad timing for the US government as the value of Bitcoin was $1,000 in the end of 2013. In 2016, the value of this digital currencies started to rise once again indicating that the US government could have got much more money.
Currently, the value of Bitcoin is $4,400 which means that if the US authorities waited until now to sell those Bitcoins, they could have earned more than $630 million which is not a small difference when compared to the actual amount they got. It was also revealed that Tim Draper was the person who bought almost 30,000 Bitcoins seized in the operation that brought Silk Road down.
Oh Oh….surprising