Silk Road founder Ross Ulbricht agrees to use $3 billion in stolen BTC to pay debt to US government

Nearly $3 billion worth of seized bitcoin will absolve Ross Ulbricht of his $183 million debt to the United States government, according to a court filing first discovered by Wired. 

Ulbricht is the founder of the now-defunct illicit marketplace Silk Road, which used bitcoin to facilitate the sale of drugs and other illegal items. 

Before the marketplace shut down, Silk Road experienced a hack in which someone made off with 69,370 BTC. In 2015, after the marketplace shut down, Ulbricht was sentenced to life in prison without parole and was ordered to pay $183 million in restitution related to Silk Road’s total sales. 

The government seized that hacker’s 69,370 BTC in November 2020. In this court filing, filed in February 2021, Ulbricht waived any rights he had to that bitcoin and is using it to pay his debt to the government. 

According to the filing: 

“Ulbricht further relinquishes all right, title and interest in the [69,370 BTC] and agrees that said property shall be forfeited to the United States and disposed of according to law by the United States. [...] The parties agree that the net process realized from the sale of the Subject Property forfeited pursuant to this agreement shall be credited toward any unpaid balance of the Money Judgment,” where the ‘Money Judgment’ is the $183 million Ulbricht owed the government in relation to his participation with Silk Road. 

The “disposal of” the surplus bitcoin could look like auctions on the General Services Administration (GSA), in which forfeited bitcoin was auctioned off in lots to willing buyers.