- US department of justice confiscated Bitcoins worth $1 billion through Silk Road and filed a civil forfeiture case in the court
- DOJ called it the largest seizure of cryptocurrency in the history of the agency
- Elliptic in its blog informed that 70,000 Bitcoin worth $350,000 were moved out of the Silk Road’s wallet to two other addresses that eventually combined into a single address by 2013
The US Department of Justice filed a civil forfeiture complaint after it seized thousands of Bitcoins worth more than $1 billion in a wallet on Tuesday. US Attorney David Anderson confirmed the news. The US agency was seeking the forfeiture of the cryptocurrency which had been in the possession of a hacker. According to the statement released by DOJ, Anderson told that an unnamed hacker referred to as ‘individual X’ agreed to forfeit the Bitcoin. He allegedly hacked into Silk Road’s website and stole the illicit cryptocurrency in 2013. This is the largest seizure of cryptocurrency in the history of the Department of Justice.
David Anderson further said that the successful prosecution of Silk Road’s founder in 2015 left open a billion-dollar question. Where did the money go? $1 billion of these criminal proceeds are now in the United States’ possession. In 2015 Silk Road’s founder Ross Ulbricht was found guilty on all the seven charges against him including drug dealing, trafficking fake IDs, hacking on the internet and was sentenced to lifetime imprisonment.
How transaction took place
London- based blockchain analytical firm explained the movement of Bitcoin worth $1 billion likely originated from the Silk Road. It is observed that 69,369 Bitcoin transacted out of the bitcoin address. Until then it had the fourth highest balance of any Bitcoin address. As on May 6, 2012 nearly 70,000 Bitcoin worth $350,000 were moved out of the Silk Road’s wallet to two other addresses. By 2013, these coins had been consolidated at a single address where they sat dormant until this week. The movement of these Bitcoins now worth nearly $1 billion. In 2015, 101 coins moved from the address to the now not in use Bitcoin exchange BTC-e. Movement of these Bitcoins may be associated with Ross Ulbricht but it is unlikely to take place as he is in jail now. BTC-e was a cryptocurrency trading platform banned by the US government and went offline in 2017.
54 new illicit bitcoin transactions found
According to the complaint IRS agents have been able to trace cryptocurrency transactions. The agents with the help of a third party Bitcoin attribution company were able to identify 54 previously undetected illegal bitcoin transactions executed through Silk Road. All of the seized funds are found to have proceeded to a specific bitcoin address that appeared to have hacked the bitcoin from the Silk Road. “Criminal proceeds should not remain in the hands of the thieves. Through CI’s expertise in following the money, we were able to track down the illicit funds,” said IRS-CI Special Agent in Charge Kelly R. Jackson.
What is Silk Road?
Silk Road is an online dark marketplace to buy and sell illegal goods especially drugs unlawfully, in exchange of Bitcoins. It was founded by Ross Ulbricht in 2011. The marketplace was shut down by U.S federal authorities in 2013 following multiple FBI raids. He was arrested in and sentenced to life in prison.
The government will now prove the case in court and that the cryptocurrency seized is subjected to forfeiture. The confiscated amount of virtual currency is auctioned by US Marshals Service at current market rates. In 2015, it auctioned $14.3 million worth 22,000 Bitcoins seized from Silk Road. The seized Bitcoins were found from Ulbricht under civil forfeiture. Earlier this year, the US Government auctioned forfeited 4,040 Bitcoins worth more than $37 million.________________________________________________________
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