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US authorities seize $1 billion worth of Silk Road Bitcoin

·Associate Editor
·2 min read

Even after Silk Road founder Ross Ulbricht was arrested and sentenced to life in prison, authorities were unable to find a huge chunk of the commissions — in Bitcoin, of course — the dark web marketplace generated. Earlier this week, authorities have traced and seized over 69,000 of the missing Bitcoin in what has become the largest seizure of cryptocurrency in the history of the Department of Justice to date. Seeing as one Bitcoin is currently valued at $15,000, the pile in DOJ’s possession is worth over $1 billion. The department has now filed a civil complaint for the Bitcoin forfeiture.

Silk Road was a massive marketplace on the dark web where people could anonymously conduct drug and gun sale transactions, among other illicit activities. Authorities shut down the platform in 2013 and arrested its founder who was known by the pseudonym “Dread Pirate Roberts.” As the Wall Street Journal notes, they only managed to seize 175,000 Bitcoin from Ulbricht back then, which is less than half of the 600,000 Bitcoin they believe the website generated in commissions.

US Attorney Anderson said in a statement:

“Silk Road was the most notorious online criminal marketplace of its day. The successful prosecution of Silk Road’s founder in 2015 left open a billion-dollar question. Where did the money go? Today’s forfeiture complaint answers this open question at least in part. $1 billion of these criminal proceeds are now in the United States’ possession.”

The Internal Revenue Service’s Criminal Investigation unit was responsible for finding the 69,000 seized Bitcoin. Agents from the unit started analyzing Silk Road’s digital wallets earlier this year and found 54 previously undetected transactions. They determined that Ulbricht didn’t make those transactions and that they were conducted by a hacker they’re referring to as “Individual X” who stole the Bitcoin in 2012 and 2013.

The DOJ says Individual X agreed to hand over what they stole after authorities tracked them down, signing a Consent and Agreement to Forfeiture with the Northern District of California’s US Attorney’s Office on November 3rd. It’s worth noting that Ulbricht was aware of the hacker’s online identity and allegedly threatened them for the Bitcoin’s return. Individual X, however, refused to give in — they simply sat on that enormous amount of money and didn’t spend it.

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The DOJ didn’t reveal what it plans to do with the massive pile of digital coins, but the government auctioned off the other Silk Road-related coins it previously seized. How much the government can get from it remains to be seen, though, since releasing lots of Bitcoin to buyers could lower its value.