US Govt Behind $1 Billion Bitcoin Transfer Of Silk Road Funds

More details have emerged on the password-protected Bitcoin wallet emptied out the night of the 2020 US Presidential Election. 

The Bitcoin wallet had links to hacker groups and had seen its balance drop from almost $1 billion in cryptocurrency to nothing overnight.

The funds in Bitcoin wallet 1HQ3Go3ggs8pFnXuHVHRytPCq5fGG8Hbhx have been found to be associated with Silk Road.

Silk Road is remembered as one of the most notorious darknet marketplaces that had been shut down in October 2013.

The marketplace traded in illicit goods and services such as narcotics, hacking-for-hire, and contract-killing. 

In 2015, Silk Road’s founder Ross Ulbricht was found guilty by a New York federal jury for his involvement in money laundering activities and in aiding the distribution of narcotics.

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For his actions constituting seven criminal counts, he serves a double life sentence.

“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,” said U.S. Attorney David Anderson today in a press release.

Largest Bitcoin seizure in DoJ history

The civil complaint had alleged that Silk Road’s operators had funneled Bitcoin transactions through a “tumbler” that made it incredibly hard to trace their footsteps via otherwise public Blockchain ledger.

Internal Revenue Service (IRS) Criminal Investigation Special Agent in Charge Kelly R. Jackson said in a press release: “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,” Jackson continued.

According to the complaint, IRS CI had sought the services of a Bitcoin analysis company to trace Silk Road’s blockchain transactions. 

The agents reviewed 54 transactions that had remained undetected up until this point and all were linked to Silk Road. 

Results of the investigation indicate, these Bitcoins had been stolen from Silk Road between 2012 and 2013. 

The funds could be traced back to a Bitcoin address 1HQ3Go3ggs8pFnXuHVHRytPCq5fGG8Hbhx which represents this mysterious wallet.

Further, the US Attorney’s Office and IRS CI agents concluded that the Bitcoins were associated with Individual X who had hacked and acquired these funds from Silk Road.

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The discovery saw over 69,369 Bitcoins, almost $1bn sitting in the mysterious wallet disappear within a day, after Department of Justice (DOJ)’s seizure.

This event marks the largest cryptocurrency seizure ever made by DOJ.

However, there’s more for the feds to do.

The allegations made by the government bodies are yet to be ruled on in a court. 

For the seizure to be finalized, onus is on the United States to present evidence that proves the forfeiture of Bitcoins is justified. It is only then that the federal government gets to keep the newly discovered treasure.