Supreme Court Rejects Bitcoin Claim from Silk Road Seizure

The United States Supreme Court has opted not to review a case concerning 69,370 Bitcoin, valued at approximately $4.38 billion, that was seized from the Silk Road dark web marketplace.

Battle Born Investments, a company claiming ownership of the Bitcoin, sought the Supreme Court's intervention, arguing that it had acquired rights to the seized cryptocurrency through a bankruptcy estate. However, the Court's decision not to take up the case leaves the government's control over the Bitcoin largely unchallenged, potentially enabling the U.S. government to sell this substantial cryptocurrency reserve.

Battle Born's Claim to the Bitcoin

The legal conflict originated when Battle Born Investments asserted that it obtained the Bitcoin through a bankruptcy claim following the closure of Silk Road in 2013. The company claimed that Raymond Ngan, a debtor in the bankruptcy case, was the elusive "Individual X" who had illicitly appropriated billions of dollars worth of Bitcoin from Silk Road.

Despite these assertions, courts have consistently ruled against Battle Born. In 2022, a district court determined that the company did not have a legitimate claim to the Bitcoin. The following year, an appeals court in San Francisco upheld this ruling, concluding that the company’s claims were not legally valid.

The recent decision by the Supreme Court to decline the case effectively closes the legal avenues for Battle Born. The Supreme Court, which generally hears only a small fraction of the over 7,000 annual review requests, chose not to pursue this matter further. This ruling significantly increases the likelihood that the government's civil forfeiture action will succeed, allowing it to proceed with plans to sell the seized Bitcoin.

The U.S. government has already begun transferring some of the Silk Road-related Bitcoin. On July 29, approximately $2 billion worth of the cryptocurrency was moved, managed by the U.S. Marshals Service through Coinbase Prime for custody. Sales of large quantities of Bitcoin by governments have historically led to market fluctuations, as evidenced by the German government selling nearly 50,000 Bitcoin in June and July, valued at over $3.15 billion, which caused notable market volatility.

Future of the Seized Bitcoin

The future actions of the U.S. government regarding the remaining Bitcoin remain uncertain. Notably, Republican presidential candidate Donald Trump has proposed establishing a "strategic Bitcoin stockpile" if he wins the upcoming election. In contrast, Democratic candidate Kamala Harris has not yet disclosed her position on managing seized cryptocurrency.

Silk Road, founded by Ross Ulbricht in 2011, was infamous for facilitating illegal transactions before its closure. Ulbricht is currently serving a life sentence without the possibility of parole for charges including money laundering and drug distribution. Trump has also indicated that he would consider commuting Ulbricht’s sentence if elected president.