On October 7, 2024, the United States Supreme Court declined to hear an appeal concerning the ownership of 69,370 Bitcoin, valued at $4.38 billion, which was seized by the government in connection to the infamous dark web marketplace, Silk Road.
The appeal was filed by Battle Born Investments, a company that claimed it had purchased rights to the seized Bitcoin through a bankruptcy estate related to an individual named Raymond Ngan. The company argued that Ngan was “Individual X,” the mysterious hacker who stole the Bitcoin from Silk Road and later turned it over to law enforcement. Battle Born claimed it was an innocent third-party owner of the Bitcoin.
The Bitcoin at the center of this case was traced to “Individual X,” a hacker who stole thousands of Bitcoin from Silk Road before eventually surrendering them to the U.S. government. At the time of the seizure in 2020, the stolen Bitcoin was valued at just over $1 billion, but its worth has since skyrocketed, making it the largest seizure of digital assets to date.
Despite these arguments, lower courts had already rejected Battle Born’s claim. Both a California federal court and a federal appeals court ruled that the company could not definitively prove that Ngan was the true identity behind “Individual X.” Without proof of Ngan’s ownership, the courts concluded that Battle Born had no legal rights to the Bitcoin.
With the Supreme Court’s decision to decline the case, the rulings of the lower courts will stand. This development paves the way for the U.S. government to sell the Bitcoin stash, one of the largest cryptocurrency seizures in history. A portion of the funds, valued at roughly $2.6 billion, has already been transferred to a wallet associated with Coinbase Prime, a potential indicator that the liquidation process may be beginning soon.
Silk Road, created by Ross Ulbricht in 2011, was a dark web marketplace that facilitated the sale of illegal goods and services using Bitcoin as the primary currency.
The platform, hidden on the Tor network, became notorious for offering drugs, weapons, and other illicit items until it was shut down by law enforcement in 2013. Ulbricht, operating under the alias “Dread Pirate Roberts,” was arrested in October 2013 and later sentenced to life in prison without the possibility of parole for his role in running the marketplace.
Former President Donald Trump, who is running for the Republican nomination in the 2024 election, has proposed that the U.S. government retain the seized Bitcoin and create a strategic reserve rather than selling it.
During the Bitcoin 2024 conference in July, Trump suggested that if re-elected, he would make it a priority to hold onto all Bitcoin currently in government possession. He has also indicated that he may pardon Ross Ulbricht, a move that could appeal to libertarian and pro-cryptocurrency voters.
Now that the Supreme Court has rejected Battle Born’s appeal, the U.S. government is expected to finalize the sale of the remaining Bitcoin. In recent months, it has already moved large amounts of the cryptocurrency, likely in preparation for an auction or sale. Previous instances of governments selling large quantities of Bitcoin, such as Germany’s liquidation of nearly 50,000 Bitcoin earlier this year, have led to concerns over potential market volatility.
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