How credible is the news about "the U.S. Department of Justice approving the sale of Silk Road Bitcoin"?
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How credible is the news about "the U.S. Department of Justice approving the sale of Silk Road Bitcoin"?
Even if it's true, the Department of Justice cannot sell its Bitcoin holdings in the short term.
Navigating Web3 tides with focused insightsAuthor: Jessy, Jinse Finance
On the morning of January 9, amid a market downturn, major cryptocurrency media outlets reported a piece of negative news: "The U.S. Department of Justice has approved the sale of $6.5 billion worth of Bitcoin seized from the dark web's Silk Road." Following this report, Bitcoin immediately dropped below $94,000.
Adding insult to injury, the crypto community was filled with despair. However, after fact-checking the story, Jinse Finance found that the source of this information lacks credibility—the reporter could not locate any official confirmation from the U.S. Department of Justice. Even if the news were true, based on past procedures for selling seized Bitcoin, the Department of Justice would generally be unable to sell these Bitcoins in the short term—specifically, before Trump takes office. Notably, Trump has already pledged that during his presidency, the United States will not sell a single Bitcoin.
In summary, the U.S. Department of Justice will not actually sell any coins at this stage, and therefore it will not exert selling pressure on the market.
Only One Source for the Report
Investigating the sources cited by various crypto media outlets reveals that all trace back to a single post by an individual blogger on X.
The account belongs to a cryptocurrency news outlet; however, access to its website requires a paid subscription, and the fee is quite high.
Taken together, Jinse Finance believes that the media outlet’s credibility is inherently low. Its X account simply posted a brief statement—"The U.S. Department of Justice has approved the sale of $6.5 billion worth of Bitcoin seized from the dark web Silk Road"—without citing any specific source, making verification impossible.
Even If True, the DOJ Cannot Sell Its Bitcoin in the Short Term
Jinse Finance reviewed historical processes used by the U.S. Department of Justice when selling seized Bitcoin and found that even if the report were accurate, the DOJ would still be largely unable to sell its holdings before Trump assumes office.
Bitcoin seized by the U.S. Department of Justice is typically auctioned off by the U.S. Marshals Service (USMS), rather than being sold directly via OTC desks or exchanges. This process is similar to how judicial authorities auction confiscated assets such as real estate or collectibles, using proceeds to replenish the national treasury.
Take the 2020 USMS auction as an example: approximately 4,040 Bitcoins were auctioned, originating from various federal criminal, civil, and administrative cases.
At that time, the USMS announced the auction on February 3, 2020, requiring potential bidders to complete registration by February 12, with the actual auction held on February 18.
According to the detailed sales terms released by the USMS, winning bidders were required to wire payment to the USMS by February 19, 2020, and the USMS would not transfer any Bitcoin until payment was confirmed.
This means that from the initial announcement to the actual completion of the auction and receipt of funds—followed potentially by resale into the open market—more than two weeks elapsed.
Currently, there are only 11 days remaining before Trump takes office. Jinse Finance checked the official USMS website and found no recent announcements regarding auctions of seized Bitcoin.
Therefore, it is clear that prior to Trump taking office, the U.S. Department of Justice will not actually sell any of the Silk Road-seized Bitcoin.
In conclusion, the widely circulated report this morning—which impacted markets—"The U.S. Department of Justice has approved the sale of $6.5 billion worth of Bitcoin seized from the dark web Silk Road"—is highly likely to be false.
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