DOJ gets Silk Road coins worth $305M stuck in Bitcoin mempool
The DOJ is moving Silk Road bitcoins around. Very slowly, as it happens.
Bairachnyi Dmitry/Shutterstock modified by Blockworks
Bitcoin (BTC) that once belonged to the Silk Road is on the move — about four months after the US Department of Justice (DOJ) sold millions of dollars worth of it on Coinbase.
A string of transactions involving Silk Road bitcoin was waiting to be confirmed Wednesday morning. Altogether, 9,825 BTC ($302.2 million) queued for sending by addresses tied to the DOJ.
The addresses are directing the bitcoin to unused addresses. The DOJ has shuffled its Silk Road stash before, so it’s too soon to say it intends to be sold immediately.
Still, authorities offloaded 9,800 BTC in March directly to US-based platform Coinbase for $21,800 per token, generating $215 million.
At the time, officials said they intended to sell an additional 41,500 BTC ($1.27 billion) seized from Silk Road hacker James Zhong across four batches.
Bitcoin is today worth $31,600 after shedding a few hundred dollars after word of the transfers first broke.
Silk Road, one of the first marketplaces powered by bitcoin payments, went dark in October 2013 as US authorities arrested founder Ross Ulbricht. He was charged the following year and eventually sentenced to consecutive life sentences plus 40 years without parole.
The DOJ’s pending Silk Road transactions are currently facing a confirmation delay, potentially caused by inadequate transaction fees. (The transactions were later confirmed.)
One had been waiting 20 minutes at time of writing, another for more than 40 minutes, with both blocks unconfirmed. The DOJ appears to have only allocated a meager sum, only $8 in fees, for these transactions. Bitcoin blocks are processed on average once every 10 minutes.
The last time the department sold coins connected to the Silk Road, the US government paid more than $215,000 in transaction fees, officials said in court filings.
A portal tracking bitcoin seized by the US government shows the Feds have missed out on $5.6 billion by selling BTC rather than holding it.
Updated Jul. 12, 2023 at 11:09 am ET: Two transactions were confirmed after around an hour. A third transaction is still pending after almost two hours. Code is law.
Updated Jul. 12, 2023 at 11:31 am ET: The third transaction was finalized after around two hours and five minutes.
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