Silk Road was a marketplace that operated on the Dark Web between 2011 and 2013, using Bitcoin as the primary currency
The US government seized $ 1 billion in Bitcoin linked to the Silk Road criminal market in the largest cryptocurrency seizure by the U.S. Department of Justice (DoJ) to date, as confirmed by the agency this week.
“Silk Road was the most famous online criminal market of its day,” Attorney General David Anderson of the Northern California District said in a press release on Thursday.
“The successful process of the founder of Silk Road in 2015 left a billion dollar question open. Where did the money go? ” Anderson added.
Silk Road is a closed online parallel market, best known for selling illegal drugs. The platform allowed people to buy and sell drugs and other illegal items using Bitcoin.
The market was closed by federal authorities in 2013, and its founder, Ross Ulbricht, was sentenced to life in prison two years later.
When Ulbricht was arrested in October 2013, federal authorities seized about 175,000 Bitcoins. However, the authorities said the site collected more than 600,000 Bitcoins through sales commissions. The latter seizure is responsible for some of these Bitcoins, explains the DoJ.
According court documents, the DoJ seized about 70,000 Bitcoins, worth about $ 1 billion, with the help of an unidentified hacker who is referred to only as “Individual X” in the documents. Bitcoins were stolen from Ulbricht in 2012 and 2013 by the hacker, who liquidated some of them, explained the Wall Street Journal. However, many of the Bitcoins were left in a digital wallet.
The coins were also seized after blockchain analysts at Elliptic, a London-based company, noted the movement of more than 69,000 Bitcoins in a digital wallet transaction linked to Ulbricht, the Washington Examiner explained.
Tom Robinson, co-founder of Elliptic, said the Bitcoin movement “may represent Ulbricht or a Silk Road seller moving its funds”, but that “it seems unlikely that Ulbricht will be able to conduct a Bitcoin transaction from prison”, reported to CNBC.
Bitcoins seized this week are expected to be much more valuable than they would be in 2013, when Bitcoin was being traded for around $ 130 each. Currently, the price of the cryptocurrency is around $ 15,000.
The seizure was the result of an investigation spearheaded earlier this year by DoJ, the criminal investigation unit of the Internal Revenue Service and Chainalysis and Excygent, two companies that manufacture Bitcoin analysis software.
The US government has not yet said what it will do with the seized Bitcoins. In the past, cryptocurrencies seized by authorities were auctioned.