> What if some of those Bitcoins are yours, not Ulbrichts? What if Silk Road is holding some of your Bitcoins as part of some transaction? Why, all you have to do is show up and make a claim for them — in a case in which the government is saying that all or substantially all of the transactions through Silk Road are federal crimes. Bring a toothbrush.

Seems to answer the question of 'what happens to all the bitcoins' pretty readily. Interesting discussion of forfeiture law and "in rem" suits at the bottom, worth reading.