The US government has seized more than $ 1 billion in bitcoins linked to the closed dark web market, Silk Road, and is suing for official confiscation of funds.
The case is the largest cryptocurrency seizure in history, and it explains why Bitcoins were changed this week. Analysts noticed the transfer on the public blockchain and speculated that it was either due to an unknown plotter on the Silk Road trying to cash out the money, or because the money was stolen by the hackers.
In fact, the Department of Justice says it tracked down the true owner of the funds, someone it calls “Individual X”, through their attempts to liquidate a small portion of the funds in 2015. “On approximately April 23, 2015, [the bitcoin account] It sent 101 Bitcoins (about $ 23,700) to BTC-e, a company that provided services linked to bitcoin and operated as an unlicensed cryptocurrency exchange, ”according to the criminal complaint.
“The Silk Road was the most famous criminal market on the Internet of its time,” said American lawyer David Anderson. The successful prosecution of the founder of the Silk Road in 2015 left the billion-dollar issue open. Where did the money go? Today’s confiscation complaint answers this at least partially open question. One billion dollars of this criminal proceeds is now in the possession of the United States. “
The complaint alleges that Person X, “whose identity is known to the government,” did not work with the Silk Road. Instead, “Individual X was able to penetrate the Silk Road and gain unauthorized and illegal access to the Silk Road, thus stealing the illicit cryptocurrency from the Silk Road and transferring it to wallets controlled by Individual X.
According to the investigation, [Ross Ulbricht, the now jailed founder of the site] He became aware of individual X’s identity online and threatened individual X to return the cryptocurrency to Ulbricht. The complaint says Individual X did not return the cryptocurrency but kept it and did not spend it.
The complaint, with the official title in part “USA for approximately 69,370 Bitcoins,” requires the Department of Justice to prove in court that the confiscated cryptocurrency is subject to forfeiture, which means that it is the proceeds of a criminal act.
“The proceeds of crime should not remain in the hands of thieves,” said Kelly R Jackson, the IRS Special Agent in charge of the criminal investigation. With CI’s expertise in tracking money, we have been able to track down illicit funds. In tracking virtual currency transactions, we will continue to hone our skills to combat illegal activities. “
Chainalysis, a blockchain analysis firm that helped the government investigate, said: “Earlier this year, IRS-CI agents used to analyze bitcoin transactions executed by Silk Road and identified 54 previously undisclosed Bitcoin transactions that represent the proceeds of illegal activity. A hacker, known as Individual X, stole this money from the Silk Road.
According to Chainalysis data, the Silk Road accounted for nearly 20% of all Bitcoin economic activity at its peak in 2013. Silk Road economic activity totaled $ 435 million (calculated based on the bitcoin price at the time), peaking at less than 40. Million USD in monthly volume in September 2013. ‘
The $ 1 billion confiscation value is equivalent to the total value of all cash and cash equivalents confiscated by the federal government in 2015, the most recent year for which records are available.