Dark Web Founder Loses $100 Million in Bitcoin After 40-Year Sentence: Where Does It Go?
A 30-year-old who co-ran a $430 million dark web drug market got 40 years in federal prison. Raheim Hamilton also agreed to give up 1,230 Bitcoin (BTC), worth about $100 million today.
What happens to those coins is governed by a 2025 White House order. It sends Bitcoin forfeited in court cases into a national reserve and bars its sale.
How a Hidden Website Moved $430 Million
Empire Market ran from 2018 to 2020 on the dark web, a hidden part of the internet reached only with special browsers.
It handled more than four million deals worth over $430 million, according to the US Justice Department. Nearly $375 million came from drug sales, including at least 13 kilograms of fentanyl.
Buyers had to pay in crypto. Hamilton and co-creator Thomas Pavey pushed users toward mixers, services that blend many people’s coins so payments are harder to trace.
Users could also rate sellers on how well they hid drugs in the mail.
US District Judge Steven C. Seeger sentenced Hamilton on Monday and fined him $5 million. He also forfeits 24.4 Ethereum (ETH) and three Virginia properties.
Where Does $230 Million in Seized Bitcoin Go?
Pavey, 41, earlier agreed to forfeit about 1,584 BTC, gold bars, three cars, and two Florida properties. He faces sentencing later this month.
Together, the two men’s coins total 2,814 BTC. That is about $234 million at Bitcoin’s current price of $83,045.
The March 2025 executive order directs Bitcoin finally forfeited in criminal or civil cases into the Strategic Bitcoin Reserve. Coins placed there cannot be sold.
However, the order allows exceptions, including returning funds to identifiable crime victims. The DOJ release did not say where Hamilton’s coins will end up.
Congress is weighing the same idea. On Sept. 16, a House committee voted 28-21 to advance a Strategic Bitcoin Reserve bill that would hold forfeited BTC for at least 20 years.
If both forfeitures become final and no exception applies, the order sends Empire Market’s Bitcoin into a stockpile built to hold, not sell.