David Canellis

This is a segment from the Supply Shock newsletter. To read full editions, <a href="https://blockworks.co/newsletter/supplyshock" target="_blank" rel="noreferrer noopener">subscribe</a>.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Second chances are increasingly rare in today’s world. But they do happen.



On Sunday evening, it was one year since then-Presidential candidate Trump pledged to commute the double-life sentence of Silk Road founder Ross Ulbricht, live on stage at the Libertarian National Convention at the Washington Hilton.&nbsp;



Eight months later, on his second day in office, Trump one-upped himself by granting Ulbricht a full and unconditional pardon, releasing him from prison after serving 12 years.&nbsp;



#FreeRoss worked. Now, Ulbricht is set to publicly address the Bitcoin world for the first time since his release this Friday, at Bitcoin 2025 in Las Vegas.



<h2 class="wp-block-heading">Living History</h2>



Ross has been free for four months. Throughout that time he’s kept up the habit of documenting his experiences, which he shares on X.



Reading over his tweets gives an insightful look into the effects of incarceration. Ross tweeted in March: “For over a decade, I didn&#8217;t have water fixtures that I could turn off and on. In prison, everything is on buttons with timers.”



“After nearly two months in freedom, I still find myself staring at faucets and shower heads, waiting for them to turn off! So weird.”



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">First birthday in freedom today. Beautiful day grilling by the pool. I&#39;ve been given a new life. It&#39;s like being born again.&mdash; Ross Ulbricht (@RealRossU) <a href="https://twitter.com/RealRossU/status/1905404620878590447?ref_src=twsrc%5Etfw">March 27, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Ross has also shared a string of “firsts” since his release: First birthday and Mother’s Day. First time touching grass with his bare feet. First <a href="https://www.instagram.com/p/DJCn4vUzasa/">cheeseburger</a>. And soon, the first Bitcoin conference.



“My big speech at Bitcoin 2025 is just a week away, but I am feeling surprisingly serene about it. I&#8217;m just looking forward to connecting with so many of you at once. It feels like I am coming home,” he tweeted last week.



Ross is also preparing for a period of travel, which “means downsizing and turning the page.”



He initially sought to auction off some of his personal belongings on eBay, but Ross <a href="https://x.com/RealRossU/status/1904648263338467786">struggled</a> to verify his identity in order to actually sell anything. He’s since turned to Scarce City, the Bitcoin-powered collectibles marketplace, where he’s listed 13 artifacts from his life before and after his stint behind bars.



<figure class="wp-block-image size-large"><img loading="lazy" decoding="async" width="1512" height="919" src="https://blockworks-co.imgix.net/wp-content/uploads/2025/05/unnamed-13.png?w=1024&amp;h=1024" alt="" class="wp-image-102992" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2025/05/unnamed-13.png?w=1512 1512w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/unnamed-13.png?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/unnamed-13.png?w=1024 1024w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/unnamed-13.png?w=768 768w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/unnamed-13.png?w=423 423w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/unnamed-13.png?w=429 429w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/unnamed-13.png?w=360 360w, https://blockworks-co.imgix.net/wp-content/uploads/2025/05/unnamed-13.png?w=80 80w" sizes="auto, (max-width: 1512px) 100vw, 1512px" /><figcaption class="wp-element-caption">Check out the full Bitcoin 2025 Ross Ulbricht collection on <a href="https://scarce.city/collections/b25-ross-ulbricht-collection">scarce.city</a></figcaption></figure>



There’s his prison sneakers, sweatsuit and t-shirt, (the latter two come with a laundry bag), and three of his oil paintings created in prison, each one a collaboration with another inmate, Omega, who taught him techniques. Ross’s prison notebook is there, his prison locker lock and three ID cards, two featuring him with a full beard.&nbsp;



Capping the auction off are a trio of items with clear sentimental value for Ulbricht: a down sleeping bag, djembe drum and backpack, including a pair of Vibram FiveFingers shoes. Each item was used leading up to Ulbricht’s 2013 arrest in San Francisco.



The auctions run for another three days and have so far attracted bids totaling 0.2875 BTC ($31,500). Something tells me those figures will rise heading into Friday.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Get the news in your inbox. Explore Blockworks newsletters:



<ul class="wp-block-list">
<li><a href="https://blockworks.co/newsletter/thebreakdown">The Breakdown</a>: Decoding crypto and the markets. Daily.</li>



<li><a href="https://blockworks.co/newsletter/empire">Empire</a>: Crypto news and analysis to start your day.</li>



<li><a href="https://blockworks.co/newsletter/forwardguidance">Forward Guidance</a>: The intersection of crypto, macro and policy.</li>



<li><a href="https://blockworks.co/newsletter/0xresearch">0xResearch</a>: Alpha directly in your inbox.</li>



<li><a href="https://blockworks.co/newsletter/lightspeed">Lightspeed</a>: All things Solana.</li>



<li><a href="https://blockworks.co/newsletter/thedrop">The Drop</a>: Apps, games, memes and more.</li>



<li><a href="https://blockworks.co/newsletter/supplyshock">Supply Shock</a>: Bitcoin, bitcoin, bitcoin.</li>
</ul>

Donald Trump

Ulbricht auction sees $31K BTC ahead of first appearance since release

Pete Rizzo

This is a segment from the Supply Shock newsletter. To read full editions, <a href="https://blockworks.co/newsletter/supplyshock" target="_blank" rel="noreferrer noopener">subscribe</a>.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Greetings, and <a href="https://x.com/pete_rizzo_/status/1905199552266649871">happy 41st birthday</a> to Ross Ulbricht!



By now, rehashing the Silk Road timeline — from a secret psychedelics lab in an off-the-grid Texas cabin to a global clandestine operation with half a dozen employees — doesn’t seem totally useful.



Besides, long-time Bitcoin History readers have already walked through the events that led to Ulbricht’s dramatic 2013 arrest in a San Francisco public library.



Anyone who missed our email from last year can <a href="https://bitcoinhistorynl.beehiiv.com/p/paid-price-200000-btc?utm_source=bitcoinhistorynl.beehiiv.com&amp;utm_medium=newsletter&amp;utm_campaign=he-paid-the-price-200-000-btc">find it in our archives</a> — it’s definitely still worth the read!



Keep in mind, though: That telling of the story misses its happy ending. It was written before President Trump <a href="https://www.newyorker.com/news/the-lede/why-trump-freed-ross-ulbricht-the-silk-roads-dread-pirate-roberts">pardoned</a> Ulbricht earlier this year, releasing him from a double-life prison sentence after serving nearly a decade.



To celebrate Ulbricht’s first birthday since his release, let’s instead pay homage to the way he integrated bitcoin payments into Silk Road, for reasons that have been largely lost on modern-day crypto.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">First birthday in freedom today. Beautiful day grilling by the pool. I&#39;ve been given a new life. It&#39;s like being born again.&mdash; Ross Ulbricht (@RealRossU) <a href="https://twitter.com/RealRossU/status/1905404620878590447?ref_src=twsrc%5Etfw">March 27, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Onto this week’s Bitcoin Legend.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXdY_VBTwQDI8dZGPhvQqbQns7ZO-IpZKxOxpWS4bgm8C-M7Qn_X5JOQh70u7NjT_GbB6Cb9rkEYhG7FZ6RzGyltQVe2JbGSnG1ssgThmqLI6K2oCSDfCoP_C7A316Hzu_fYw-v81g?key=v4uBzLAEjvmSTiGzzRF8icXB" alt=""/><figcaption class="wp-element-caption">Silk Road founder Ross Ulbricht | Freeross.org modified by Blockworks</figcaption></figure>



<h2 class="wp-block-heading">No turning back</h2>



Bitcoin was the obvious fit for Silk Road. It uniquely separates global payments from both governmental and corporate control, imbuing the user with financial self-sovereignty that goes beyond real-world cash.&nbsp;



“Every single transaction that takes place outside the nexus of state control is a victory for those individuals taking part in the transaction,” Ulbricht <a href="https://www.forbes.com/sites/andygreenberg/2013/04/29/collected-quotations-of-the-dread-pirate-roberts-founder-of-the-drug-site-silk-road-and-radical-libertarian/">wrote</a> in 2012.



It was bitcoin’s uncontrollable nature that matched his vision: a worthy complement to Silk Road’s hidden existence through Tor.&nbsp;



Ulbricht fully understood that bitcoin transfers are immutable. This property, combined with its pseudonymity, forms the basis for what makes bitcoin so interesting as the currency for underground activity: autonomy.



Applied in the right way — with stringent opsec in mind — bitcoin would enable true freedom of commerce on Silk Road.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXc3NOKb1sfJDVeEKdcZQhf3OoTWE43EdMwy16Z35HP_5TUhJYdtilCI-O0vw-_7CyR1d_5q0hMhktvL_uxEAH2PQVGPHyZHrwdinr4VPCgED0qgkaedi51Ch3477qqTubGfTGyAKQ?key=v4uBzLAEjvmSTiGzzRF8icXB" alt=""/><figcaption class="wp-element-caption">Silk Road was active during one of bitcoin’s first great bull runs, but was taken down just before it hit $1,000 for the first time. (Onchain volume = total onchain volume, not just on Silk Road.)</figcaption></figure>



Ulbricht intended the platform “to be about giving people the freedom to make their own choices, to pursue their own happiness, however they individually saw fit,” and not the “convenient way for people to satisfy their drug addictions” it had partly become, as he <a href="https://bitcoinmagazine.com/culture/the-long-and-winding-story-of-silk-road-bitcoins-earliest-major-application">once</a> put it.



Silk Road needed guardrails if it was to solely accept bitcoin for payment. Quality control was crowdsourced via a public review system, and to protect users from fraud, Ulbricht positioned Silk Road as mediator for all transactions on the platform.



That meant escrow. In an automated system, any time a purchase was made, the buyer’s bitcoin payment was temporarily held in a wallet controlled by Silk Road admins, including Ulbricht.



Silk Road then notified the seller that payment was received, and the seller could then proceed with shipment. Once the package arrived on the other side, the buyer would lodge a confirmation on the Silk Road site, after which the bitcoin was released to the seller, who could then withdraw the coins to their own wallets.



Moderators manually handled disputes on a case-by-case basis via a ticker system, similar to how Amazon, eBay and Airbnb operate today.



There’s no question that these processes were riddled with trust assumptions. Both buyers and sellers were required to trust that Silk Road wouldn’t simply vanish with all their bitcoin, and that Silk Road was well equipped to safeguard user funds at all.



<figure class="wp-block-image"><img decoding="async" src="https://lh7-rt.googleusercontent.com/docsz/AD_4nXcVfTQZJbeeZarnXH4pkN5Zgf-PqRarafAZBsIz84WxnU_-hOG5MTTZMLsKHif57mcJ_LE0FVSpKT0iZ7EXpMWbVPnAt3zkDs66bHRMfe_RqpezValUaTkTDmOHw46h0yM11uz5ag?key=v4uBzLAEjvmSTiGzzRF8icXB" alt=""/><figcaption class="wp-element-caption">This Silk Road payment flowchart was Exhibit 113 A during Ulbricht’s trial</figcaption></figure>



Users also had to believe that moderators would manage disputes appropriately. At times, mods required users to submit potentially-incriminating photographic evidence, including shipping labels and tracking information, which would also need to be protected against leaks and theft.



Regardless, the system worked. By the time the Feds shuttered Silk Road, it had processed 9.5 million BTC in sales — 80% of bitcoin’s circulating supply at the time — and earned 600,000 BTC in commissions, which in September 2013 was <a href="https://web.archive.org/web/20140220003018/https://www.cs.columbia.edu/~smb/UlbrichtCriminalComplaint.pdf">equivalent</a> to $1.2 billion and $80 million, respectively.



Still, Silk Road largely integrated bitcoin in all the right ways. The platform automatically generated a new bitcoin address for every transaction — making them harder to trace. All transactions also took place over Tor, which, when used correctly, can keep IP addresses hidden.



If Silk Road had been built today, maybe it might’ve held escrowed coins in a multisig wallet. At least that would spread some of the trust around. Bitcoin multisigs wouldn’t be <a href="https://en.bitcoin.it/wiki/Pay_to_script_hash#:%7E:text=342ftSRCvFHfCeFFBuz4xwbeqnDw6BGUey%20is%20a%20Bitcoin%20address,good%20example%20to%20understand%20P2SH.">enabled</a> until April 2012 — more than a year after Silk Road first launched.



<h2 class="wp-block-heading">Fit for purpose</h2>



Setting aside those concerns, bitcoin and only bitcoin could do what Ulbricht needed.&nbsp;



This is especially true, considering there were only a <a href="https://coinmarketcap.com/historical/20130428/">handful</a> of alternative cryptocurrencies in Silk Road’s heyday, including Litecoin, Peercoin and Namecoin, all of which had a tiny fraction of bitcoin’s market cap and liquidity.



Let’s say Silk Road was launched on Ethereum in 2025. Perhaps for faster payments, more flexible escrow functionality, or stablecoin support (Silk Road actually allowed users to lock the dollar value of their bitcoin at time of purchase to minimize the impact of price volatility).



If that was the case, hypothetically, <a href="https://blockworks.co/news/ethereum-is-not-under-attack-understanding-mev-boost-relays">one OFAC sanction</a> on Silk Road’s contracts would immediately make it somewhat harder for its transactions to be processed — 31% of all Ethereum blocks right now are <a href="https://www.mevwatch.info/">configured</a> to uphold OFAC directives through censorship. In November, that figure was over 70%.



Not to mention, practically all major stablecoins have in-built functionality that allows their issuers to freeze and confiscate tokens at will, which they regularly do upon request from law enforcement.&nbsp;



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true"><a href="https://twitter.com/hashtag/Bitcoin?src=hash&amp;ref_src=twsrc%5Etfw">#Bitcoin</a> price: $12.20 <a href="https://t.co/w3yalprfg6">pic.twitter.com/w3yalprfg6</a>&mdash; The Bitcoin Historian (@pete_rizzo_) <a href="https://twitter.com/pete_rizzo_/status/1862866887899541947?ref_src=twsrc%5Etfw">November 30, 2024</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



Such features clearly clash with the notion of an independent, libertarian marketplace, regardless of the power held by Ulbricht and the rest of the Silk Road team on the platform.&nbsp;



Silk Road’s legacy is then this: For all the philosophical distance separating “bitcoin” from “crypto” today, the idealistic platform that Ulbricht built was the divergence catalyst. It was a schism point that cracked open the massive fault line now dividing the space.&nbsp;



Through bitcoin, Silk Road undermined the traditional financial system and, even more critically, the entire social order. Ulbricht acted as a freedom maximalist building freedom tech, with none of the cosplay.&nbsp;



It’s a goal far removed from the compliant commerce that stablecoins and their smart contract platforms — which emerged in the wake of Silk Road’s demise — aspire to serve.&nbsp;



Those systems have grown to augment legacy finance rather than free us from it in the ways Ulbricht had hoped.



<h2 class="wp-block-heading">Unexpected results</h2>



Of course, even Bitcoin’s robust censorship resistance was not enough to protect Ulbricht from the US government. The same goes for other Silk Road operators and power users.



In total, more than 144,000 BTC ($26 million then, $12.6 billion today) was seized from wallets initially controlled by Ulbricht, plus an additional 120,000 BTC from two hackers who’d separately stolen bitcoin from Silk Road while it was active.



It’s likely that tens of thousands more coins were seized from Silk Road users in less high-profile cases over the years.



Therein lies the rub. Bitcoin is clearly resistant in digital space, and Ulbricht was brilliant enough to understand that Silk Road could be the very first killer crypto app. In many ways, there’s been no second-best to this day.



The same can’t be said in our physical meatspace. Ulbricht’s coins were literally taken from him by force and <a href="https://jlopp.github.io/us-marshals-bitcoin-auctions/">sold for relative pennies</a> on their current dollar value.



<figure class="wp-block-embed is-type-rich is-provider-twitter wp-block-embed-twitter"><div class="wp-block-embed__wrapper">
<blockquote class="twitter-tweet" data-width="550" data-dnt="true">There were no stars in prison. The overhead floodlights drowned them out completely. It was like a 5th wall above, cutting me off from the world. I went far from all the lights last night, laid down on a boulder, and looked up at the stars. No more walls. <a href="https://t.co/9StRTIjt77">pic.twitter.com/9StRTIjt77</a>&mdash; Ross Ulbricht (@RealRossU) <a href="https://twitter.com/RealRossU/status/1902450286469509275?ref_src=twsrc%5Etfw">March 19, 2025</a></blockquote><script async src="https://platform.twitter.com/widgets.js" charset="utf-8"></script>
</div></figure>



In turn, the US government response to the Silk Road case has formed the playbook for what’s become the Feds’ strategic bitcoin reserve.&nbsp;



Seized coins may never be sold again, and at this stage, the only way the reserve can get any bigger is for authorities to seize even more coins from even more sovereign individuals, no doubt landing some in prison for a sentence comparable to the time Ulbricht served.



And those coins are only valuable, in part, due to the implicit promise that they can’t be tampered with under normal circumstances.&nbsp;



Nothing can square that irony in any way that’s satisfactory, and when bitcoin does indeed become a boon to the Treasury Department, then it will awkwardly have Ulbricht and Silk Road to thank.



Luckily for Ulbricht, he’s just received a gift far greater than any bitcoin stash — freedom — leading to what I can only imagine is the happiest of 41st birthdays.



To Ross. Bitcoin could never be what it is today without him.



— David



<hr class="wp-block-separator has-alpha-channel-opacity"/>



<h2 class="wp-block-heading">Rizzo’s take, from the Bitcoin Historian</h2>



“What did you get done this week?” Such was the subject line for Elon Musk’s now infamous emails to the US government, but as David points out above, that same email could be sent to the crypto industry today.



Or I’d imagine that might be Ross Ulbricht’s reaction to his realization this week that <a href="https://x.com/RealRossU/status/1904577765434941886">eBay is slow on verifying his identity</a>, a fact that is momentarily keeping him from auctioning his belongings. Is it real user friction? An elaborate troll? On today’s hyper commercialized internet, where Snoop Dogg might “<a href="https://www.liebertpub.com/doi/10.1089/can.2024.0003#:~:text=On%20November%2016%2C%202023%2C%20the,what%20seemed%20like%20a%20decision">give up smoke</a>” and then sell you a grill, perhaps you can forgive the incredulity. Ross, I would hope, has skipped the web’s descent into a maze of ref-links.



Still, one can’t help but think that Ross might be wondering what bitcoin and crypto have accomplished in his absence, perhaps now more than ever. As the eBay example shows, online commerce frictions remain substantial, despite bitcoin’s initial promise to quell them.



Indeed, there were a host of social commentators who suggested as such, proposing that Ross should relaunch the Silk Road or something like it.



Certainly if there’s someone who could help us chart a course forward, it would be Ross. Far-fetched? Maybe. Then again, so was the idea that any president would pardon him in the first place. If there’s anything I’ve learned in bitcoin, it’s to expect the improbable.&nbsp;



— Rizzo



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Get the news in your inbox. Explore Blockworks newsletters:



<ul class="wp-block-list">
<li><a href="https://blockworks.co/newsletter/thebreakdown">The Breakdown</a>: Decoding crypto and the markets. Daily.</li>



<li><a href="https://blockworks.co/newsletter/empire">Empire</a>: Crypto news and analysis to start your day.</li>



<li><a href="https://blockworks.co/newsletter/forwardguidance">Forward Guidance</a>: The intersection of crypto, macro and policy.</li>



<li><a href="https://blockworks.co/newsletter/0xresearch">0xResearch</a>: Alpha directly in your inbox.</li>



<li><a href="https://blockworks.co/newsletter/lightspeed">Lightspeed</a>: All things Solana.</li>



<li><a href="https://blockworks.co/newsletter/thedrop">The Drop</a>: Apps, games, memes and more.</li>



<li><a href="https://blockworks.co/newsletter/supplyshock">Supply Shock</a>: Bitcoin, bitcoin, bitcoin.</li>
</ul>

Bitcoin

How Silk Road carved the fault line that separates ‘bitcoin’ and ‘crypto’

Casey Wagner

This is a segment from the Forward Guidance newsletter. To read full editions, <a href="https://blockworks.co/newsletter/forwardguidance">subscribe</a>.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



President-elect Donald Trump has made a lot of promises for his first day in office, to the crypto industry and otherwise.&nbsp;



With his inauguration just days away, let’s review some of his vows:&nbsp;



<h2 class="wp-block-heading">Increase tariffs </h2>



Trump’s proposed <a href="https://blockworks.co/news/unpacking-trump-potential-tariff-policies">tariff plans</a> have made headlines for months. In late November, though, he made a new promise: a 10% increase on China, plus 25% tariffs on Canada and Mexico. The latter two countries quickly signaled they were willing to negotiate.&nbsp;



Just this week Trump said that the “External Revenue Service,” a new agency that would be tasked with collecting tariff income, will be created on Monday. We at Forward Guidance are of the belief that tariff increases will happen at a much <a href="https://blockworks.co/news/trump-gradual-tariff-policy">slower</a> pace, though.&nbsp;



<h2 class="wp-block-heading">Commute Silk Road creator’s sentence</h2>



Trump in May <a href="https://www.politico.com/news/2024/05/25/trump-commute-ross-ulbricht-sentence-libertarian-convention-00160025">pledged</a> to commute the sentence of Ross Ulbricht, who has been <a href="https://blockworks.co/news/silk-road-founder-10-years">serving</a> a double life sentence plus 40 years since 2015.&nbsp;



Ulbricht&nbsp; was convicted on seven federal counts including narcotics conspiracy and money laundering for his role in founding the <a href="https://blockworks.co/tag/silk-road">Silk Road</a> marketplace. Prosecutors also presented evidence during trial supporting allegations that Ulbricht had paid $730,000 in murder-for-hire fees, but he was not charged with this crime.&nbsp;



<h2 class="wp-block-heading">Overturn SAB 121</h2>



Trump <a href="https://www.washingtonpost.com/politics/2025/01/13/andreessen-tech-industry-trump-administration-doge/">reportedly</a> plans to reverse the <a href="https://blockworks.co/news/senate-gensler-sec-overturn-sab-121">SEC’s controversial</a> SAB 121 guidance, which states that crypto custodians should list custodied assets as liabilities on their balance sheet. 



President Biden last year <a href="https://blockworks.co/news/house-fails-to-override-anti-sab121-veto">vetoed</a> a bipartisan resolution that sought to do just this, <a href="https://www.whitehouse.gov/briefing-room/presidential-actions/2024/05/31/a-message-to-the-house-of-representatives-on-the-presidents-veto-of-h-j-res-109/">arguing</a> the legislation “would inappropriately constrain” the SEC.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Get the news in your inbox. Explore Blockworks newsletters:



<ul class="wp-block-list">
<li><a href="https://blockworks.co/newsletter/thebreakdown">The Breakdown</a>: Decoding crypto and the markets. Daily.</li>



<li><a href="https://blockworks.co/newsletter/empire">Empire</a>: Crypto news and analysis to start your day.</li>



<li><a href="https://blockworks.co/newsletter/forwardguidance">Forward Guidance</a>: The intersection of crypto, macro and policy.</li>



<li><a href="https://blockworks.co/newsletter/0xresearch">0xResearch</a>: Alpha directly in your inbox.</li>



<li><a href="https://blockworks.co/newsletter/lightspeed">Lightspeed</a>: All things Solana.</li>



<li><a href="https://blockworks.co/newsletter/thedrop">The Drop</a>: Apps, games, memes and more.</li>



<li><a href="https://blockworks.co/newsletter/supplyshock">Supply Shock</a>: Bitcoin, bitcoin, bitcoin.</li>
</ul>

Trump’s day 1 promises come due 

Former President Donald Trump’s keynote address at the Bitcoin 2024 conference in Nashville over the weekend wasn’t a campaign rally, organizers said, but judging by the line to take photos with his cardboard cutout, attendees begged to differ.&nbsp;



Twenty thousand ticket holders and an additional 15,000 onlookers flocked to Nashville last week for the Bitcoin 2024 conference, organizers claim.&nbsp;



Other politicians, some more embraced by the bitcoin community than others, had their time on the main stage as well: Sens. Cynthia Lummis, R-Wyo., and Tim Scott, R-S.C., plus Democrat Rep. Wiley Nickel of North Carolina.&nbsp;&nbsp;



Read more: <a href="https://blockworks.co/news/on-the-margin-newsletter-trump-crypto-promises">On the Margin Newsletter: Trump’s crypto ‘promises’ at Bitcoin 2024</a>



Current and former presidential candidates Robert F. Kennedy Jr. and Vivek Ramaswamy also made the rounds.&nbsp;



Paraphernalia declaring “Make America Great Again’” — and the arguably more popular “Make Bitcoin Great Again” — was a dime a dozen inside Music City Center. So was swag depicting Ross Ulbricht, who is currently <a href="https://blockworks.co/news/silk-road-founder-10-years">serving a double life sentence</a> for creating and operating the darknet site <a href="https://blockworks.co/tag/silk-road">Silk Road</a>.&nbsp;



I made eye contact with a woman wearing a “Free Ross. Vote Trump.” T-shirt in the mirror of the ladies’ room ahead of <a href="https://blockworks.co/news/donald-trump-speaks-bitcoin-2024">Trump’s keynote</a> on Saturday.&nbsp;



“Couldn’t he have pardoned Ross when he was president?” I asked, glancing at her shirt.&nbsp;



She glanced at the press badge hanging from my neck. “No. Too political.” She was already walking away before I could follow up.&nbsp;



Ulbricht, convicted in 2015 on seven counts of fraud and conspiracy, may now just be political enough. <a href="https://blockworks.co/tag/donald-trump">Trump</a> in May pledged to commute Ulbricht’s sentence, along with a slew of other pardons he plans to make should he win in November. He repeated the promise again during his keynote address on Saturday, adding that he stood with any bitcoiners who have had their assets unjustly seized.&nbsp;



“As you know, most of the bitcoin currently held by the United States government was obtained through law enforcement action,” Trump said. “You know that they took it from you. Let&#8217;s take that guy&#8217;s life. Let&#8217;s take his family. His house. His bitcoin.”&nbsp;



Read more: <a href="https://blockworks.co/news/us-government-dumps-bitcoin-silk-road">US government dumps bitcoin stolen from Silk Road, $1.2B to go</a>



The crowd cheered.&nbsp;



Ulbricht was a major theme of the weekend. A booth frequently manned by Ulbricht’s mother, Lyn, passed out free T-shirts. Bitcoin Magazine CEO David Bailey has <a href="https://x.com/DavidFBailey/status/1815913850740564314">said</a> that Vice President Kamala Harris should vow to commute Ulbricht’s sentence before engaging with the bitcoin community.&nbsp;



The crowd throughout the weekend skewed young, with many minors tagging (or being dragged) along with their parents.&nbsp;



A baby, just 14 weeks old, sat in the front row during Trump’s speech, donning a MAGA onesie and headphones. The outing was made difficult by the venue’s no-bag policy, the mother told me, which extended to strollers. But she had no regrets.&nbsp;



Another attendee told me he opted to leave his two-and-a-half-year-old at home, saying the security and crowd were “too much,” although his child has already been to 16 conferences.&nbsp;



Several young blond children ran around the Nashville Municipal Auditorium on Thursday night where conference attendees gathered for a karate combat fight. I was told they were <a href="https://blockworks.co/news/on-the-margin-newsletter-ether-etf-data-takeaways">Kennedy’s grandchildren</a>. The independent presidential candidate was inside, posing for selfies and commentating on the action in the ring.&nbsp;



Despite bitcoin’s relatively quiet price action in recent weeks, the mood was, generally speaking, positive. Most side events featured passed hors d&#8217;oeuvres and buffets — companies shelling out is a true bull market signal.&nbsp;



As one man made his way over to a saved seat toward the front of the room for Trump’s speech, I overheard him bragging to his friends. A woman the night before had agreed to leave the bar with him “without even seeing the Lambo.”&nbsp;



After all, what would a bitcoin conference be without the mention of a Lamborghini? &nbsp;



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Get the news in your inbox. Explore Blockworks newsletters:



<ul class="wp-block-list">
<li><a href="https://blockworks.co/newsletter/thebreakdown">The Breakdown</a>: Decoding crypto and the markets. Daily.</li>



<li><a href="https://blockworks.co/newsletter/empire">Empire</a>: Crypto news and analysis to start your day.</li>



<li><a href="https://blockworks.co/newsletter/forwardguidance">Forward Guidance</a>: The intersection of crypto, macro and policy.</li>



<li><a href="https://blockworks.co/newsletter/0xresearch">0xResearch</a>: Alpha directly in your inbox.</li>



<li><a href="https://blockworks.co/newsletter/lightspeed">Lightspeed</a>: All things Solana.</li>



<li><a href="https://blockworks.co/newsletter/thedrop">The Drop</a>: Apps, games, memes and more.</li>



<li><a href="https://blockworks.co/newsletter/supplyshock">Supply Shock</a>: Bitcoin, bitcoin, bitcoin.</li>
</ul>

In Nashville, Bitcoiners and American politics collide

Jeff Albus

More than 30,100 bitcoin linked to the Silk Road hack and under the control of the US government appeared to be on the move Tuesday.



A wallet known to be owned by the US Department of Justice initiated a transfer of 0.001 BTC – around $65 as of Tuesday’s prices –&nbsp; to a Coinbase wallet. Given the small amount, on-chain sleuths speculate that it could have been a test transfer in preparation for a larger sale of the long-held coins.&nbsp;



When large sums of bitcoin are moved, especially amounts linked to high-profile cases, it often involves a series of calculated steps to ensure security and compliance. In such cases, a small test transfer is a common preliminary measure, used to confirm that the transfer pathway is secure and operational before moving the entire sum. This helps the sender to verify that the recipient&#8217;s address is accurate without risking the full amount.



Despite the small amount intended for the test, the transaction required moving a much larger lot of 30,175 BTC that was previously part of a single input, reflecting the full balance of a prior transaction. The majority of these coins were then returned to the government&#8217;s wallet.



This process is inherent to how Bitcoin transactions work: If an input is used in a transaction, it must be spent in its entirety. The excess, not allocated to the transaction&#8217;s recipient, is sent back to the sender as change. This ensures that every bitcoin remains accounted for in the blockchain&#8217;s ledger, helping to maintain continuity, traceability, and the integrity of on-chain ownership across transactions.



This is not the first instance of the US government moving confiscated bitcoin to a third-party address. Back in March 2023, officials transferred a significant sum of bitcoin recovered from dark web activities, including an amount similarly directed at a Coinbase wallet.



The US government is known to have used Coinbase to sell off bitcoin connected to the Silk Road bust in the past. In June 2023, officials sold nearly 10,000 coins, which amounted to around $215M at the time of the sale.



The Silk Road, an online black market best known today for its role in the third-party sale of illicit drugs, was shut down by the FBI in October 2013. Its founder, Ross Ulbricht, was arrested and a large amount of bitcoin was confiscated as part of the crackdown. Ulbricht was later convicted of money laundering, computer hacking, and conspiracy to traffic narcotics in February 2015. He is currently serving a double life sentence plus forty years without the possibility of parole.



Ulbricht recently <a href="https://blockworks.co/news/silk-road-founder-10-years">marked a decade of imprisonment</a> following his sentencing. His case continues to draw attention, particularly from the Web3 and libertarian communities, highlighting the debate over the fairness of his punishment and the broader implications for internet freedom.



In 2022, it was <a href="https://www.coindesk.com/policy/2022/04/22/seized-silk-road-bitcoin-to-clear-ross-ulbrichts-183-million-debt/">reported</a> that Ulbricht&#8217;s $183 million debt to the US government would be cleared through the sale of bitcoin seized in connection to the Silk Road case. This development came amid ongoing calls for clemency or a commutation of Ulbricht&#8217;s sentence, <a href="https://www.change.org/p/clemency-for-ross-ulbricht-condemned-to-die-in-prison-for-an-e-commerce-website?original_footer_petition_id=14280198&amp;algorithm=promoted&amp;source_location=petition_footer&amp;grid_position=13&amp;pt=AVBldGl0aW9uAA8YzAAAAAAAZgva9KC11XliNWIxMzUzMg%3D%3D">supported</a> by over 250 organizations and hundreds of thousands of signatories on a petition seeking his release.



Despite two unsuccessful appeals to the Supreme Court, Ulbricht&#8217;s family, particularly his mother Lyn Ulbricht, continues to campaign for his freedom. They&#8217;ve sought to shift the narrative around his involvement with the Silk Road, emphasizing <a href="https://law.justia.com/cases/federal/appellate-courts/ca2/15-1815/15-1815-2017-05-31.html#:~:text=">alleged</a> investigative abuses that occurred during his trial, as well as the seemingly disproportionate nature of his sentence compared to others involved in similar activities.



Casey Wagner contributed reporting.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Get the news in your inbox. Explore Blockworks newsletters:



<ul class="wp-block-list">
<li><a href="https://blockworks.co/newsletter/thebreakdown">The Breakdown</a>: Decoding crypto and the markets. Daily.</li>



<li><a href="https://blockworks.co/newsletter/empire">Empire</a>: Crypto news and analysis to start your day.</li>



<li><a href="https://blockworks.co/newsletter/forwardguidance">Forward Guidance</a>: The intersection of crypto, macro and policy.</li>



<li><a href="https://blockworks.co/newsletter/0xresearch">0xResearch</a>: Alpha directly in your inbox.</li>



<li><a href="https://blockworks.co/newsletter/lightspeed">Lightspeed</a>: All things Solana.</li>



<li><a href="https://blockworks.co/newsletter/thedrop">The Drop</a>: Apps, games, memes and more.</li>



<li><a href="https://blockworks.co/newsletter/supplyshock">Supply Shock</a>: Bitcoin, bitcoin, bitcoin.</li>
</ul>

Coinbase

DOJ moves 30K BTC connected to Silk Road seizure

Bitcoin holders have lots to be happy about in the New Year: Prices are up, a spot ETF seems all but approved, and a record number of bitcoins haven’t moved in one year. Today is even Bitcoin’s 15th birthday.



The US government should also be chuffed. Thanks to a healthy price rally, the Feds are now holding at least $8.3 billion in bitcoin — up from $5 billion less than three months ago.



Between November 2020 and 2022, authorities in three separate actions altogether disclosed seizing 207,189 bitcoin (<a href="https://blockworks.co/price/btc">BTC</a>) tied to seminal dark web market Silk Road, its hacker Jimmy Zhong, as well as the hackers of crypto exchange Bitfinex.&nbsp;



Read more: <a href="https://blockworks.co/news/doj-bitcoin-silk-road-mempool">DOJ gets Silk Road coins worth $305M stuck in Bitcoin mempool</a>



Less than 5% of those hauls have been sold after officials offloaded 9,861 BTC once owned by Silk Road on Coinbase last February. The trades netted $215 million for $21,800 per bitcoin on average, about half the current price.



US attorneys at the time <a href="https://blockworks.co/news/us-government-dumps-bitcoin-silk-road">said</a> they intended to sell the rest of <a href="https://blockworks.co/tag/silk-road">Silk Road’s</a> bitcoin — 41,491 BTC worth $1 billion then and $1.8 billion today — in four batches over the next calendar year, a period which expires in two months.&nbsp;



<figure class="wp-block-embed is-type-wp-embed is-provider-flourish wp-block-embed-flourish"><div class="wp-block-embed__wrapper">
<iframe loading="lazy" class="wp-embedded-content" sandbox="allow-scripts" security="restricted" title="Interactive or visual content" src="https://flo.uri.sh/visualisation/16329021/embed#?secret=nSLFLidBAu" data-secret="nSLFLidBAu" frameborder="0" scrolling="no" height="575" width="700"></iframe>
</div><figcaption class="wp-element-caption">The US government has historically sold bitcoin way too early</figcaption></figure>



Only one batch has been potentially processed so far, when the US Department of Justice sent 8,200 BTC ($252 million then, $350 million now) to Coinbase last July. But it’s so far unconfirmed whether any trades actually took place.



Counting those transactions as sales would mean the US has generated $640 million by seizing and selling bitcoin over the past decade.



The price of bitcoin has multiplied 70 times in that time. Had the US government opted to hold all its seized bitcoin, rather than sell it, the Feds would still have around 400,000 BTC ($17.4 billion), nearly double its current cache.



Markets could indeed see more Silk Road bitcoin dumped by the US government over the next couple of months. There’s however no word yet on a timeline to sell the bitcoin <a href="https://blockworks.co/news/razzelkhan-couple-plead-guilty">seized from Bitfinex hackers</a> Ilya &#8220;Dutch&#8221; Lichtenstein and Heather “Razzlekhan” Morgan.



<figure class="wp-block-embed is-type-wp-embed is-provider-flourish wp-block-embed-flourish"><div class="wp-block-embed__wrapper">
<iframe loading="lazy" class="wp-embedded-content" sandbox="allow-scripts" security="restricted" title="Interactive or visual content" src="https://flo.uri.sh/visualisation/16333751/embed#?secret=db2zc28uVv" data-secret="db2zc28uVv" frameborder="0" scrolling="no" height="575" width="700"></iframe>
</div><figcaption class="wp-element-caption">Toggle the chart to US dollars to see just how much the US has missed out on (figures rounded)</figcaption></figure>



In any case, the US could have the largest government bitcoin stash in the world, <a href="https://www.forbes.com/sites/michaeldelcastillo/2023/06/16/us-government-owns-way-more-bitcoin-than-any-other-countryso-why-arent-they-selling-it/">according</a> to at least one set of researchers last year. The US was found leagues ahead of El Salvador, Ukraine, Bhutan, Venezuela and Finland, which together hold only 4,000 BTC ($172 million).&nbsp;



China was left out of that particular paper. Beijing <a href="https://www.coindesk.com/markets/2020/11/27/chinese-authorities-have-seized-a-massive-4b-in-crypto-from-plustoken-scam/">seized</a> 195,000 BTC ($8.4 billion) from crypto Ponzi scheme PlusToken in 2020 alongside swathes of other cryptocurrencies, including ether (<a href="https://blockworks.co/price/eth">ETH</a>) and XRP.&nbsp;



If Beijing hasn’t sold too early like the US, that would put the two superpowers basically tied for bitcoin holdings.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Get the news in your inbox. Explore Blockworks newsletters:



<ul class="wp-block-list">
<li><a href="https://blockworks.co/newsletter/thebreakdown">The Breakdown</a>: Decoding crypto and the markets. Daily.</li>



<li><a href="https://blockworks.co/newsletter/empire">Empire</a>: Crypto news and analysis to start your day.</li>



<li><a href="https://blockworks.co/newsletter/forwardguidance">Forward Guidance</a>: The intersection of crypto, macro and policy.</li>



<li><a href="https://blockworks.co/newsletter/0xresearch">0xResearch</a>: Alpha directly in your inbox.</li>



<li><a href="https://blockworks.co/newsletter/lightspeed">Lightspeed</a>: All things Solana.</li>



<li><a href="https://blockworks.co/newsletter/thedrop">The Drop</a>: Apps, games, memes and more.</li>



<li><a href="https://blockworks.co/newsletter/supplyshock">Supply Shock</a>: Bitcoin, bitcoin, bitcoin.</li>
</ul>

Happy New Year: US government now holds more than $8B in bitcoin

James Cirrone

Ross Ulbricht has officially been behind bars for ten years, a grim milestone for the Silk Road founder who is serving a double life sentence — plus 40 years — without parole.



His X account, updated with his fiancée’s help, reminded the world of his conviction with a Sunday evening <a href="https://twitter.com/RealRossU/status/1708605103044010424?s=20">post</a>.&nbsp;



“I sometimes fear I&#8217;ll spend the rest of my life behind concrete walls and locked doors. But I have no one else to blame. It&#8217;s my poor choices that led me here,” the post read. “All I can do now is pray for mercy.”



Ulbricht, now 39, created the Silk Road online marketplace, named for the ancient Eurasian trade route, back in 2011. Modeling itself after eBay, Silk Road offered users the ability to transact anonymously with one another using bitcoin.&nbsp;



The site, which was accessible through Tor, facilitated sales totaling 9.5 million bitcoin (valued at $1.2 billion at the time of transaction) from February 2011 to July 2013, according to a 2013 FBI <a href="https://web.archive.org/web/20140220003018/https://www.cs.columbia.edu/~smb/UlbrichtCriminalComplaint.pdf">criminal complaint</a> against Ulbricht.&nbsp;



Ulbricht thought of himself as an “idealistic libertarian” and a passionate advocate for free markets. He alleges that ideology inspired him to create an online marketplace based on the non-aggression principle. It would allow users to buy and sell anything they desired, even if the items would be harmful to the buyer, so long as no third party was harmed in the process. Ulbricht claims that the site <a href="https://freeross.org/what-was-silk-road/#ProhibitedItems">worked to prohibit</a> numerous items falling outside of this criteria, including child pornography, acts of violence-for-hire, stolen property, and anything used to “harm or defraud” others.



Read more: <a href="https://blockworks.co/news/doj-bitcoin-silk-road-mempool">DOJ gets Silk Road coins worth $305M stuck in Bitcoin mempool</a>



But rather than becoming a hub for the free and anonymous sale of books, art, clothing and electronics — the kinds of items Ulbricht <a href="https://freeross.org/case-overview/">claims</a> he intended the site to be for — Silk Road became synonymous with the illegal drug trade.



US authorities shut down Silk Road in October 2013, and the FBI arrested Ulbricht on Oct. 1, 2013. The government also <a href="https://www.cbsnews.com/news/silk-road-founder-wants-30-million-bitcoin-us-govt/">seized</a> 144,336 BTC, worth about $30 million at the time.



Ulbricht was later <a href="https://www.fbi.gov/history/artifacts/ross-william-ulbrichts-laptop#:~:text=A%20judge%20sentenced%20Ulbricht%20to,digital%20currency%20from%20this%20case.">convicted</a> of drug trafficking, computer hacking and money laundering in February 2015. He was sentenced to life in prison on May 29, 2015.



“Ross has expressed heartfelt remorse for creating Silk Road and accepts responsibility for the mistake he made. Although he never intended harm, he has learned how even well-meaning and idealistic actions can have unintended consequences,” a blog post on freeross.org <a href="https://freeross.org/case-overview/">stated</a>.&nbsp;



The remorseful tone that Ulbricht has struck has, at times, been shared by Sam Bankman-Fried — <a href="https://blockworks.co/news/sam-bankman-fried-trial-starting-soon">whose trial is set to begin Tuesday</a>, days after Ulbricht’s tenth year of incarceration. The two share additional commonalities.



Read more: <a href="https://blockworks.co/news/us-government-dumps-bitcoin-silk-road">US government dumps bitcoin stolen from Silk Road, $1.2B to go</a>



Both were major figures in the crypto space, though Ulbricht was involved at a time when bitcoin was much more under the radar. While they were in the public eye, both Bankman-Fried and Ulbricht were young, idealistic and were ultimately accused of some similar crimes, including money laundering.&nbsp;



Notably, there is no equivalent movement behind the former leader of FTX to free him from jail or to drop the charges against him like there is with Ulbricht. A Change.org petition requesting clemency for the Silk Road founder has garnered over half a million signatures.



While Ulbricht was initially accused by the US government of involvement in several sensational and violent crimes, including a murder-for-hire plot, he was never formally charged with any violent crimes in court.



Ulbricht claims these allegations are false and that he never planned a hit against anyone. Prosecutors went <a href="https://web.archive.org/web/20160305020239/http://www.theguardian.com/technology/2013/nov/21/silk-road-founder-held-without-bail">on the record</a> in 2013 saying they believed none of the alleged killings transpired.



There have also been complaints that Ulbricht’s sentence is disproportionate when compared to others involved with Silk Road and subsequent “darknet” marketplaces.



For example, Cornelis Jan “SuperTrips” Slomp, who made a name for himself as the most prolific drug dealer on Silk Road, was convicted and sentenced to 10 years in prison in May 2015. In 2021, he was granted a compassionate release due to Covid-19 nearly six years into his sentence, according to <a href="https://www.vice.com/en/article/4adjaw/i-made-millions-selling-drugs-online-then-it-all-came-crashing-down">Vice</a>.



The two men who tried to resurrect Silk Road — Blake Benthall and Thomas White — also received much lighter scrutiny than Ulbricht. White was <a href="https://www.theguardian.com/technology/2019/apr/12/uk-man-jailed-guiding-mind-behind-silk-road-drugs-site-dark-web">sentenced</a> to over five years in prison by UK authorities in 2019 for his role in operating Silk Road 2.0. Benthall was charged in November 2014 but is <a href="https://www.vice.com/en/article/nea4kw/silk-road-2-admin-defcon-blake-benthall-tax-crimes-cooperate">believed</a> to have avoided prison time over Silk Road 2.0 due to a guilty plea that requires him to cooperate with law enforcement.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Get the news in your inbox. Explore Blockworks newsletters:



<ul class="wp-block-list">
<li><a href="https://blockworks.co/newsletter/thebreakdown">The Breakdown</a>: Decoding crypto and the markets. Daily.</li>



<li><a href="https://blockworks.co/newsletter/empire">Empire</a>: Crypto news and analysis to start your day.</li>



<li><a href="https://blockworks.co/newsletter/forwardguidance">Forward Guidance</a>: The intersection of crypto, macro and policy.</li>



<li><a href="https://blockworks.co/newsletter/0xresearch">0xResearch</a>: Alpha directly in your inbox.</li>



<li><a href="https://blockworks.co/newsletter/lightspeed">Lightspeed</a>: All things Solana.</li>



<li><a href="https://blockworks.co/newsletter/thedrop">The Drop</a>: Apps, games, memes and more.</li>



<li><a href="https://blockworks.co/newsletter/supplyshock">Supply Shock</a>: Bitcoin, bitcoin, bitcoin.</li>
</ul>

Ross Ulbricht

Silk Road founder notes 10 years in prison on eve of Bankman-Fried trial

Bitcoin (<a href="https://blockworks.co/price/btc">BTC</a>) 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.&nbsp;



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) <a href="https://www.justice.gov/usao-sdny/pr/silk-road-dark-web-fraud-defendant-sentenced-following-seizure-and-forfeiture-over-34">seized</a> 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 <a href="https://blockworks.co/news/imprisoned-silk-road-founder-sold-his-first-nft-to-a-dao-trying-to-free-him">Ross Ulbricht</a>. He was charged the following year and eventually sentenced to consecutive life sentences plus 40 years without parole.



The DOJ&#8217;s <a href="https://www.blockchain.com/explorer/transactions/btc/31f1ad8cec13978f1b93403641eb0c08144a450d7266eaf1fbaa4fd859b093d0">pending</a> Silk Road <a href="https://www.blockchain.com/explorer/transactions/btc/7dcbeff9e6da0f4ec5133d2f8b6fbe8bb73e05c5ddc8f5e410d408f8150e02ca">transactions</a> are currently facing a confirmation delay, potentially caused by inadequate transaction <a href="https://www.blockchain.com/explorer/transactions/btc/3c4e8e98890fa5c633d2a4f853751513e0a6558baa2318914eec73c727ef8316">fees</a>.&nbsp;(The transactions were later confirmed.)



One had been waiting 20 minutes at time of writing, another for more than 40 minutes, with <a href="https://www.blockchain.com/explorer/transactions/btc/7dcbeff9e6da0f4ec5133d2f8b6fbe8bb73e05c5ddc8f5e410d408f8150e02ca">both</a> 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 <a href="https://blockworks.co/news/us-government-dumps-bitcoin-silk-road">department sold coins</a> connected to the Silk Road, the US government paid more than $215,000 in transaction fees, officials said in court filings.



A <a href="https://jlopp.github.io/us-marshals-bitcoin-auctions/">portal</a> 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.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Get the news in your inbox. Explore Blockworks newsletters:



<ul class="wp-block-list">
<li><a href="https://blockworks.co/newsletter/thebreakdown">The Breakdown</a>: Decoding crypto and the markets. Daily.</li>



<li><a href="https://blockworks.co/newsletter/empire">Empire</a>: Crypto news and analysis to start your day.</li>



<li><a href="https://blockworks.co/newsletter/forwardguidance">Forward Guidance</a>: The intersection of crypto, macro and policy.</li>



<li><a href="https://blockworks.co/newsletter/0xresearch">0xResearch</a>: Alpha directly in your inbox.</li>



<li><a href="https://blockworks.co/newsletter/lightspeed">Lightspeed</a>: All things Solana.</li>



<li><a href="https://blockworks.co/newsletter/thedrop">The Drop</a>: Apps, games, memes and more.</li>



<li><a href="https://blockworks.co/newsletter/supplyshock">Supply Shock</a>: Bitcoin, bitcoin, bitcoin.</li>
</ul>

DOJ gets Silk Road coins worth $305M stuck in Bitcoin mempool

Katherine Ross

Known as Variety Jones, Silk Road adviser Roger Thomas Clark was sentenced to 20 years in prison on Tuesday, with US prosecutors citing a conspiracy to “distribute massive quantities of narcotics” via bitcoin payments. 



Clark was additionally ordered to forfeit $1.6 million of proceeds.&nbsp;



During the trial of Silk Road founder Ross Ulbricht, Clark emerged as a mentor and adviser to Ulbricht. Ulbricht was given a double life sentence for operating the black market. 



Cryptocurrency advocates have repeatedly derided Ulbricht’s sentence, <a href="https://blockworks.co/news/imprisoned-silk-road-founder-sold-his-first-nft-to-a-dao-trying-to-free-him" target="_blank" rel="noreferrer noopener">including raising funds to campaign for his release</a>.



A <a href="https://www.justice.gov/usao-sdny/pr/senior-adviser-operator-silk-road-online-black-market-sentenced-20-years-prison">statement</a> issued Tuesday by the Southern District of New York, which prosecuted Clark’s case, noted that, in addition to his role as an adviser, Clark also weighed in on how to “protect the Silk Road empire,” even suggesting to Ulbricht the hire of a hitman to kill a staffer accused of stealing $350,000. 



Prosecutors outlined Clark’s role in the Silk Road, which they categorized in line with previous cases: an illicit bitcoin-based marketplace operating on the Tor network designed to facilitate the buying and selling of illicit and illegal goods and services around the world.&nbsp;



Ulbricht’s journal, which was used in his case, said Clark was a “real mentor.” Clark helped with the infrastructure of the Silk Road — implementing the rules that governed it, as well as promotions and associated sales. He also helped Ulricht to dodge law enforcement when they began investigating the darknet.



Clark was extradited to the US to face trial from Thailand — where he was imprisoned — in 2018.



The Silk Road operated from approximately 2011 to 2013, drawing the attention of authorities in the US and elsewhere in the process for its support of anonymous transactions via Bitcoin. 



In March, the US government sold over <a href="https://blockworks.co/news/us-government-dumps-bitcoin-silk-road" target="_blank" rel="noreferrer noopener">9,800 bitcoins connected to the Silk Road</a> for about $215 million, according to a court filing. 



The bitcoin was connected to James Zhong, a hacker accused of targeting the Silk Road. Zhong was <a href="https://blockworks.co/news/silk-road-hacker-sentenced" target="_blank" rel="noreferrer noopener">sentenced to a year and a day in prison</a> for the 2012 wire fraud back in April.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Get the news in your inbox. Explore Blockworks newsletters:



<ul class="wp-block-list">
<li><a href="https://blockworks.co/newsletter/thebreakdown">The Breakdown</a>: Decoding crypto and the markets. Daily.</li>



<li><a href="https://blockworks.co/newsletter/empire">Empire</a>: Crypto news and analysis to start your day.</li>



<li><a href="https://blockworks.co/newsletter/forwardguidance">Forward Guidance</a>: The intersection of crypto, macro and policy.</li>



<li><a href="https://blockworks.co/newsletter/0xresearch">0xResearch</a>: Alpha directly in your inbox.</li>



<li><a href="https://blockworks.co/newsletter/lightspeed">Lightspeed</a>: All things Solana.</li>



<li><a href="https://blockworks.co/newsletter/thedrop">The Drop</a>: Apps, games, memes and more.</li>



<li><a href="https://blockworks.co/newsletter/supplyshock">Supply Shock</a>: Bitcoin, bitcoin, bitcoin.</li>
</ul>

Silk Road adviser ‘Variety Jones’ sentenced to 20 years in prison

The US government sold off more than 9,800 BTC connected to the Silk Road darknet marketplace for about $215 million earlier this month, a court filing released Friday shows.&nbsp;



James Zhong pleaded guilty to hacking Silk Road in 2012 and stealing more than 50,000 BTC (worth less than $1 million at the time), which the government <a href="https://blockworks.co/news/us-government-now-has-more-btc-than-largest-crypto-holders" target="_blank" rel="noreferrer noopener">seized in November</a> 2022.&nbsp;



“In total from the Zhong investigation, the Government has obtained final orders of forfeiture for approximately [51,680.32 BTC], valued at over $3.4 billion at the time of seizure,” the court filing noted.&nbsp;



On March 14, the government sold about 9,861.2 BTC for around $21,800 per token. On this date, bitcoin was trading on most exchanges at a high of around $26,500 and a low of around $24,000, according to <a href="https://blockworks.co/price/btc" target="_blank" rel="noreferrer noopener">Blockworks Research</a>.



Government officials racked up more than $215,000 in transaction fees for the sale, court documents note. Officials added that they plan to sell the remaining 41,500 BTC ($1.2 billion) in a series of four batches this year. The method of sale wasn’t disclosed.



It is not the first time the US has sold off seized crypto. In 2014, officials unloaded around 30,000 BTC, also taken in connection with Silk Road, to venture capitalist Tim Draper.&nbsp;



The BTC was valued at around $17 million at the time of the auction, but today would be worth more than $850 million. A <a href="https://jlopp.github.io/us-marshals-bitcoin-auctions/" target="_blank" rel="noreferrer noopener">dashboard</a> tracking US government bitcoin auctions estimates more than $5 billion has been left on the table by selling BTC too early.



Bitcoin was trading about 1% higher Friday afternoon in New York following the release of the court filing, hovering around $28,450.



US authorities shut down Silk Road in October 2013, arresting maintainer Ross Ulbricht. He was given a double life sentence two years later without possibility of parole.



Updated Mar. 31, 2023 at 12:10 pm ET: Added auction dashboard.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Get the news in your inbox. Explore Blockworks newsletters:



<ul class="wp-block-list">
<li><a href="https://blockworks.co/newsletter/thebreakdown">The Breakdown</a>: Decoding crypto and the markets. Daily.</li>



<li><a href="https://blockworks.co/newsletter/empire">Empire</a>: Crypto news and analysis to start your day.</li>



<li><a href="https://blockworks.co/newsletter/forwardguidance">Forward Guidance</a>: The intersection of crypto, macro and policy.</li>



<li><a href="https://blockworks.co/newsletter/0xresearch">0xResearch</a>: Alpha directly in your inbox.</li>



<li><a href="https://blockworks.co/newsletter/lightspeed">Lightspeed</a>: All things Solana.</li>



<li><a href="https://blockworks.co/newsletter/thedrop">The Drop</a>: Apps, games, memes and more.</li>



<li><a href="https://blockworks.co/newsletter/supplyshock">Supply Shock</a>: Bitcoin, bitcoin, bitcoin.</li>
</ul>

US Government Dumps Bitcoin Stolen From Silk Road, $1.2B To Go

Bessie Liu

The US Department of Justice has seized roughly $1 billion worth of bitcoin (BTC) from a man who “unlawfully obtained” more than 50,000 bitcoins from the Silk Road dark web internet marketplace in 2012.



James Zhong pleaded guilty in court on Nov. 4 to committing wire fraud and is set to be sentenced in February.



The whereabouts of the stolen 50,000 BTC remained unknown for more than 10 years, according to Damian Williams, US attorney for the southern district of New York.



Zhong had executed a detailed scheme designed to steal bitcoin from the Silk Road Marketplace — one of the first modern darknet markets. Silk Road operated as a Tor hidden service — a privacy tool that allows anonymous internet browsing.&nbsp;



Tyler Hatcher, a criminal investigator for the Internal Revenue Service (IRS) said following the heist, Zhong “attempted to hide his spoils through a series of complex transactions.”&nbsp;



But that didn’t prevent law enforcement from following the bitcoin trail. After obtaining a search warrant for Zhong’s residence in November 2021, authorities located the lost bitcoins in “an underground floor safe,” as well as on a single-board computer in a bathroom closet. The computer was beneath blankets in a popcorn tin stored in a bathroom closet.&nbsp;



The bitcoins were worth roughly $3.4 billion at the time of the seizure. Officials also found nearly $662,000 in cash.



“This case shows that we won’t stop following the money, no matter how expertly hidden —&nbsp; even to a circuit board in the bottom of a popcorn tin,” Williams said in a <a href="https://www.justice.gov/usao-sdny/pr/us-attorney-announces-historic-336-billion-cryptocurrency-seizure-and-conviction">statement</a>.



In February, a New York couple was indicted for stealing about 120,000 BTC, <a href="https://cms.blockworks.co/couple-arrested-as-government-recovers-3-6b-in-stolen-bitcoin/">much of which was recovered</a> by law enforcement.



Another Silk Road-related seizure in November 2020 netted the government 70,000 BTC.



The latest haul puts the US government significantly <a href="https://bitcointreasuries.net/">ahead of the largest corporate holders</a> of BTC — more than <a href="https://cms.blockworks.co/tag/Microstrategy/">Microstrategy</a>, Block.one or the soon-to-be-released surviving bitcoins from the bankrupt Mt. Gox crypto exchange.&nbsp;



Forfeited assets are likely to be administered by the Treasury Executive Office for Asset Forfeiture, which manages the Treasury Forfeiture Fund (TFF) — an account for where non-tax forfeitures are deposited.



Previously, seized assets have been auctioned off to various bidders. Most notably, in 2014, venture capitalist Tim Draper purchased 30,000 bitcoins for an undisclosed amount.



This story was updated on Nov. 7 at 3:18 p.m. ET, to clarify the current US dollar value of the bitcoin seized.



<hr class="wp-block-separator has-alpha-channel-opacity"/>



Get the day’s top crypto news and insights delivered to your inbox every evening.&nbsp;<a href="https://cms.blockworks.co/newsletter/?source=end" target="_blank" rel="noreferrer noopener">Subscribe to Blockworks’ free newsletter</a>&nbsp;now.



<hr class="wp-block-separator has-alpha-channel-opacity"/>

US Government Now Has More BTC Than Largest Crypto Holders

Morgan Chittum

<div id="highlights-block_61a93e5a988e1" class="highlights">
 <ul>
 <li>The Ross Ulbricht Genesis Collection consists of artwork Ulbricht has done behind bars and throughout his childhood</li>
 <li>The collection will be minted on Ethereum</li>
 </ul>
 
</div>



Ross Ulbricht, a renowned bitcoin proponent who was sentenced to life in prison after founding e-commerce platform Silk Road, is creating and auctioning off non-fungible tokens (NFTs).



The Ross Ulbricht Genesis Collection consists of artwork Ulbricht has done behind bars and throughout his childhood, which he described as a depiction of “his [life] story” in a <a href="https://rossulbricht.medium.com/my-nft-f2b4a9f1955c" target="_blank" rel="noreferrer noopener">blog post.</a>&nbsp;



<blockquote class="wp-block-quote is-layout-flow wp-block-quote-is-layout-flow">“Suddenly, sitting in prison, I had time for drawing again. I reconnected with my artistic side, producing illustrations that told the story I was going through,” Ulbricht said. “I was able to connect to those of you in the free world through my art. The isolation I felt was tempered by it.”&nbsp;</blockquote>



The collection of 10 NFTs will be minted on Ethereum and sold on <a href="https://superrare.com/artwork-v2/ross-ulbricht-genesis-collection-30841" target="_blank" rel="noreferrer noopener">SupeRare’s</a> platform until next Wednesday. The highest bid for the auction (which started today) is currently at over $1 million worth of ether.&nbsp;



Silk Road holds a momentous position in the history of cryptocurrency, making Ulbricht a bitcoin hero to some and controversial to many.&nbsp;&nbsp;



Starting in 2011 and until his arrest in 2013, Silk Road allowed anonymous shoppers to buy anything, as long as it didn’t harm a third party, using bitcoin. Goods offered ranged from drugs, Fake IDs, art and more.&nbsp;



Ulbricht, whose story became the subject of <a href="https://www.goodreads.com/book/show/31920777-american-kingpin" target="_blank" rel="noreferrer noopener">American Kingpin: The Epic Hunt for the Criminal Mastermind Behind the Silk Road</a>, was eventually arrested in a San Francisco public library and later convicted of seven charges including conspiracy to traffic narcotics, conspiracy to computer hacking and money laundering by means of the internet.



Ross, a first-time offender, is serving a double life sentence plus 40 years, without the possibility of parole. This inordinately long sentence has galvanized supporters to find ways to help him and others like him who find themselves behind bars.



“In America, you&#8217;re not supposed to give a death in prison sentence in a situation where no one&#8217;s been prosecuted for inflicting any bodily harm,” his mother, Lyn Ulbricht, said in a Twitter space on Wednesday.&nbsp;



<div class="wp-block-image"><figure class="aligncenter size-full"><img loading="lazy" decoding="async" width="460" height="330" src="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/78994038-2B5D-4979-B8DB-BA331380CFA2_4_5005_c.jpeg" alt="Art by Ross Ulbricht" class="wp-image-12096" srcset="https://blockworks-co.imgix.net/wp-content/uploads/2021/12/78994038-2B5D-4979-B8DB-BA331380CFA2_4_5005_c.jpeg?w=460 460w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/78994038-2B5D-4979-B8DB-BA331380CFA2_4_5005_c.jpeg?w=300 300w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/78994038-2B5D-4979-B8DB-BA331380CFA2_4_5005_c.jpeg?w=358 358w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/78994038-2B5D-4979-B8DB-BA331380CFA2_4_5005_c.jpeg?w=364 364w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/78994038-2B5D-4979-B8DB-BA331380CFA2_4_5005_c.jpeg?w=305 305w, https://blockworks-co.imgix.net/wp-content/uploads/2021/12/78994038-2B5D-4979-B8DB-BA331380CFA2_4_5005_c.jpeg?w=80 80w" sizes="auto, (max-width: 460px) 100vw, 460px" /><figcaption>Source: Ross Ulbricht</figcaption></figure></div>



According to Ulbricht’s mother, proceeds from the NFT auction will be donated to charity, specifically for “helping the incarcerated.”



“Ross wants to use his art to help people. And we&#8217;re starting out with helping the incarcerated [and their families with] the suffering they go through,” Lyn said, adding that funds could go toward helping family members visit those who are in prison.



In response to the Ross Ulbricht Genesis Collection, a group of crypto investors have banded together to form a decentralized autonomous organization (DAO) called <a href="https://freerossdao.com/" target="_blank" rel="noreferrer noopener">FreeRossDAO.</a>



The DAO, which was announced on Wednesday, will use part of its funds to collectively bid on Ulbricht’s NFT collection. The organization has over $1.5 million worth of ether in its treasury balance, according to its <a href="https://freerossdao.com/" target="_blank" rel="noreferrer noopener">website</a>. (PleasrDAO seeded the FreeRossDAO multisig with 240 ETH.)



Multisigners for FreeRossDAO include Trippy, Trippy Labs/Chief Freeing Officer; Nadya Tolokno, of Pussy Riot fame and PleasrDAO; Jamis also from PleasrDAO; Cobie from UpOnly; Path, Superhero; René, a lifelong friend of Ross; Elliot, another friend of Ross and program director for Musicambia, an organization building music schools in prisons across the US.



“We really want to get this bootstrapped, started and get the community together to essentially fight for the freedom of Ross but also to fight for fixing this broken prison system,” a member of the DAO, who goes by <a href="https://twitter.com/_jamiis?s=20" target="_blank" rel="noreferrer noopener">“Jamis”</a> online, said in the same Twitter space on Wednesday.



<hr class="wp-block-separator"/>



Get the day’s top crypto news and insights delivered to your inbox every evening.&nbsp;<a href="https://cms.blockworks.co/newsletter/?source=end" target="_blank" rel="noreferrer noopener">Subscribe to Blockworks’ free newsletter</a>&nbsp;now.



<hr class="wp-block-separator"/>