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08/10/24
25
Supreme Court Bypasses Bitcoin Ownership Case, Clearing Path for $4.38B Government Sale
The United States Supreme Court has opted not to hear a case concerning the ownership of approximately 69,370 Bitcoin, valued at around $4.38 billion. This cryptocurrency was seized by the government from the Silk Road dark web marketplace. The case was presented by Battle Born Investments, which argued that it had a legal claim over the Bitcoin through a bankruptcy estate.
The Supreme Court’s decision not to take on the case is significant because it potentially paves the way for the US government to sell the seized Bitcoin. Battle Born Investments had previously been unsuccessful in both district court and appeals court, where it attempted to establish ownership through a claim in the bankruptcy proceedings following Silk Road’s closure in 2013. The courts found no merit in the firm’s argument that Raymond Ngan, a figure in the bankruptcy case, was “Individual X” responsible for the theft of Bitcoin from Silk Road. Ultimately, a judge in the appellate court dismissed the case, stating that Battle Born lacked a valid claim to the bitcoins in question.
With the Supreme Court declining to review the case, the federal government’s civil forfeiture claim appears stronger, making it more likely that the Bitcoin will be sold. Earlier, the government had already transferred around $2 billion worth of these assets. These transfers involved the Marshals Service, which employs Coinbase Prime for safeguarding seized digital currencies.
Historically, large-scale cryptocurrency sales by governments have led to significant market fluctuations. For instance, when Germany executed a sale of nearly 50,000 Bitcoin, the market experienced notable volatility. The future intentions of the US government concerning the Bitcoin remain uncertain, but speculation abounds, particularly in the context of the upcoming election, where candidates have made various claims regarding cryptocurrency policies. Silk Road was established in 2011 by Ross Ulbricht, who is currently serving a life sentence for several criminal charges related to the operation of the marketplace.
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