The United States government has seized more than $ 1 billion in bitcoins connected to the closed darknet market Silk Road And sue to officially confiscate funds.
The case is the largest cryptocurrency seizure in history, and it explains why bitcoins were changed this week. Analysts were Notice the transfer on the public blockchain He speculated that it was either because of an unknown common conspirator on the Silk Road trying to disbursed the money, or because the money had been stolen by pirates.
In fact, the Justice Department says it tracked the true owner of the funds, the person it calls “Individual X,” through their attempts to liquidate a small portion of the funds in 2015. “On April 23, 2015 around, [the bitcoin account] It sent 101 Bitcoins (approximately $ 23,700) to BTC-e, a company that provided services linked to Bitcoin and operates as an unlicensed digital currency 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 forfeiture 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 the identity of individual X 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 funds, we have been able to track down illicit funds. The Washington DC cybercrime unit is uniquely specialized. 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 with its investigations, said: “Earlier this year, IRS-CI agents used Bitcoin Transaction Analysis to analyze bitcoin transactions executed by the Silk Road and identified 54 previously undiscovered Bitcoin transactions that represent the proceeds of illegal activity. They also found that one of the hackers, known as Individual X, stole this money off the Silk Road.
According to Chainalysis data, the Silk Road accounted for nearly 20% of all Bitcoin economic activity at its peak in 2013. The 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 equals 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.