After being apprehended by US authorities at Atlanta in 2017, Dark Web based illicit drug dealer Gal Vallerius, who goes by the name of OxyMonster has been sentenced to a 20 year prison term by US District Judge Robert Scola. This decision comes after the French-Israeli was convicted of both narcotics trafficking and money laundering and he now begins his lengthy incarceration in a South Florida prison facility.
Operating on the Dark Web’s Dream Market drug platform, Vallerius confessed to selling illegal drugs like cocaine, heroin, Ritalin and Fentanyl, for which he was paid in Bitcoin Cash and Bitcoin. This admission was part of a plea agreement and as a result, he loses in excess of $700k in cryptocurrencies, which now become property of the US government.
Not a Unique Occurrence
A seizure of this kind is not a first, as Ross Ulbricht - the creator of online drug platform Silk Road - was sentenced to life in 2015, forfeiting in the region of 144,000 Bitcoins in the process. At the time, Bitcoin was priced at a lowly $300, which is under a 20th of its current value, giving you some idea of just how much money Ulbricht had made from his Dark Web drug operation. When this vast quantity of crypto was sold on at various auctions by the US government, it received around $48m for the haul.
It still remains unclear whether the cryptocurrencies seized in this latest bust will be sold on at auction in the same way. Given the way Bitcoin’s price soared in the months and years after the Silk Road crypto auctions, there was much criticism aimed at the US authorities, who could have been sitting on up to as much as $800m if they had delayed selling it off. However, Bitcoin is not displaying anything like as much upward trajectory (at the moment), leading to a degree of uncertainty of how they will proceed.
Justice Department Investigation
Another factor that is further muddying the waters as to the future plans of what the US government intends to do with cryptocurrencies it seizes during its actions against online criminals, is the fact that theJustice Department is still in the process of investigating possible manipulation of crypto prices, something it began in May of this year.
Depending on the outcome of this ongoing probe into the murky world of the Dark Web and the inner workings of the crypto markets, we could see an adverse impact on crypto values. This is something that the US government will surely be aware of and it could dictate when they decide to offload the cryptocurrencies that fall into their possession.
More cases of this kind are expected in the near future, as the clampdown continues. What market analysts have to decide, is whether any crypto auctions held by the US government from this point are indicative of some kind of impending conclusion to their investigations or just an arbitrary decision to release their value.
Your guess folks, is as good as ours.