U.S. Government Seized $1 Billion in Bitcoin Linked to “Silk Road” Market
Published on November 6, 2020
- The “Silk Road” money movement that took place a couple of days back has a very clear explanation.
- The U.S. government finally took control of the wallet that was under monitoring in the past seven years.
- Someone had stolen the money from the notorious marketplace and just kept it there indefinitely.
Earlier in the week, someone withdrew Bitcoin worth approximately one billion USD from a “burned” wallet that was known to have had links to the notorious dark web market “Silk Road.” Now, we learned that this move was made by the U.S. Department of Justice after they managed to seize the particular wallet.
The Silk Road was established back in February 2011, and it grew to become one of the most massive marketplaces on the dark web. The FBI immediately noticed and kept a close eye on many of the transactions that were taking place there. In 2013, DDoS problems plagued the marketplace, and soon, the brain behind it was arrested by the feds.
During its operation, 1.2 billion USD flew around, of which $80 million (about 70 Bitcoin at the time) were kept by the Silk Road operator in the form of commissions. We all know how Bitcoin price went in the years that followed so that $80 million went up to one whole billion dollars in value - but the amount was still out of reach, locked in the wallet.
But the money wasn’t in the Silk Road owner’s possession because a hacker had managed to steal it from the marketplace and move it to his/her own wallet. The investigators call this person “Individual X.” That person signed a Consent and Agreement to Forfeiture with the U.S. Attorney’s Office in California this week. Hence, the money came finally into the hands of the United States government. It remains unknown how the FBI managed to reach this person and who “Individual X” exactly is.
What they did share was that they followed the trace of 54 individual transactions that took place back in April 2013, which is around the time the DDoS attacks occurred. Probably, the hacker grabbed the chance and moved to steal the crypto at a moment when Silk Road’s team couldn’t respond. One of the companies that worked with the FBI agents in this tracing effort was “Chainalysis,” but there are several others who haven’t been mentioned.
Interestingly, the person who was holding all that money didn’t attempt to move it around or pass it through Bitcoin tumbler services in the last seven years, so he/she could be afraid to do it, and at the same time, too scared to hand it over to the state.
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