Silk Road operator Banmeet Singh, a British national, pleaded guilty to US authorities on January 26th. This case involves the largest Bitcoin seizure operation in the history of the US Drug Enforcement Administration (DEA), with nearly 8,100 Bitcoins confiscated.
(Background:
Air raid alert! The US government will sell $114 million worth of Bitcoins, still holding over 210,000 BTC
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The US Department of Justice announced on January 26th that Banmeet Singh, the British operator of the Silk Road, had pleaded guilty to US authorities after being extradited from London last year.
It is worth noting that this case also involved the largest Bitcoin seizure operation in the history of the DEA, with a total of nearly 8,100 Bitcoins, valued at approximately $349 million at current market prices!
Largest Bitcoin seizure case in DEA history
According to the official announcement of the US Department of Justice, the 40-year-old Banmeet Singh was arrested in London in April 2019. Between 2012 and 2017, Singh operated eight drug distribution centers and received drugs from overseas, repackaged them, and then sold large quantities of prohibited drugs to users in various states in the United States through dark web markets such as Silk Road, Alpha Bay, Hansa, Dream Market, and others.
On the users’ side, they paid for the drugs through cryptocurrencies such as Bitcoin, MoneyGram, PayPal, and cash. Among the cryptocurrencies confiscated by the DEA, there were approximately 8,100 Bitcoins, with a value of only about $150 million at the time of seizure, but the current market price has doubled to $349 million!
The US government is one of the world’s largest Bitcoin whales, second only to Satoshi Nakamoto and Binance
According to data from the cryptocurrency intelligence platform Arkham, the US government is currently one of the world’s largest Bitcoin whales, with a holding of 216,400 Bitcoins, with a total value of $9.4 billion, which may rise again due to this seizure.
According to the ranking data from bitinfocharts, the current holdings of the US government are second only to the 1.1 million Bitcoins held in Satoshi Nakamoto’s addresses (approximately 110,000 addresses hold about 1.1 million BTC, but have not been used for a long time) and the 248,600 Bitcoins in the labeled Binance cold wallet (which should belong to customers).
Image Source: Arkham
Where did such a large amount of Bitcoins come from? According to on-chain data tool Dune, in the period from November 2020 to January 2022, the US government seized over 200,000 Bitcoins from cybercriminals and dark web markets in three different operations. Currently, these BTCs are mainly stored in encrypted, password-protected offline cold wallets controlled by the US Department of Justice, the Internal Revenue Service, or other institutions.
The specific source details are as follows:
November 2020, Silk Road’s largest darknet black market, seized 69,369 BTC, now worth over $3 billion
January 2022, Bitfinex hacker’s seizure, 94,643 BTC, now worth over $4 billion
March 2022, seizure from Silk Road hacker James Zhong, 51,326 BTC, the US government still holds 41.5K BTC from this seizure.
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How will the US government’s holding of over 200,000 BTC affect the Bitcoin market in the next move?